May natural gas prices recovered around 1% today as forecasts trended even colder through the month of April.

The role of weather was clearly seen as the May contract rallied the most on the day.

This fit right with our expectations, as we warned clients yesterday that headed into the weekend we could see prices bounce back towards $2.72 but any rally would be brief. Sure enough prices got to $2.717 but reversed back lower through the trading day today.

It was clear this morning in our Morning Update for clients that weather would be a supportive factor as well with a significant overnight Gas Weighted Degree Day (GWDD) increase.

Our sentiment accordingly was neutral with prices sitting up 1.3% on the day, right near where they closed.

This afternoon we continued to see impressive colder weather models, with Climate Prediction Center forecasts significantly increasing cold risks through the 8-14 Day time period.

Yet the rest of the strip lagged through the day, a day after it had seemed to support the prompt month contract.

The result was a dip in K/M yesterday but an even larger bounce today, even as K settled decently below its Wednesday level.

Certainly part of this bounce can be attributed to weather, but this spread movement has implications for how risk is skewed in natural gas prices headed into next week as well, and is particularly interesting when compared to a V/F that ticked lower today.