Cold through April has been particularly impressive, with indications that Gas Weighted Degree Days (GWDDs) for the month of April could approach record levels. Through the first 21 days of April we did not see a single day with GWDDs below the 1981-2010 or 5-year average per the National Weather Service. 

The National Weather Service month-to-date temperature anomalies show just how impressive this cold is to average, with much of the country off the bottom of the scale. 

When combined with our forecasts through the end of the month, we see that combined Utility Gas Weighted Heating Degree Days and Population Weighted Cooling Degree Days for the month of April appear likely to reach the 500 GWDD mark, which is far above the average sitting around 400 GWDDs. 

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It is this 100+ GWDD deviation from average that has helped us extend natural gas withdrawal season through April and further deplete gas stockpiles. 

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Yet natural gas prices have not rallied much over the past month and a half off this cold. Instead, we have seen prices at the front of the strip remain firm while the rest of the strip has sold-off. 

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Seen along just the 2018 strip, cold in April has allowed for a sustained rally in the K/V natural gas spread (the difference between the May contract and the October contract), with weather driving up short-term demand into May and depleting stockpiles further, accordingly supporting the front of the natural gas strip. However, flat price along the front of the strip has not risen as much as production has grown in tandem with this weather catalyst and the market seems relatively confident that production can make up this storage deficit around current prices (at least for now). 

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The key here is to see that weather is both a crucial driver of price action in the natural gas market but also far from the only driver, and at times the role of significant weather events can be offset by other factors or disguised along the curve. In this case, what could end up being a record April for weather-driven gas demand certainly had an impact, but was not as directly bullish flat price as some had expected, with the rest of the natural gas forward curve showing how these developments got priced in.