May natural gas prices recovered some of yesterday's losses as strong cash prices early in the day pulled the May contract off its lows. Prices ended up settling up a bit less than a percent on the day. 

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The signature of a cash-led rally was clearly seen today with gains strongest at the front of the natural gas strip.

The K/M May/June spread accordingly continued its rally higher. 

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Before the cash rally this morning though prices moved within one tick of the $2.62 level we had been watching, which we alerted subscribers to this morning in our Morning Text Message Alert. 

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Meanwhile, weather continues to help keep cash prices elevated and has contributed to this large rally in the K/M spread. The result is that K/M is the second narrowest it has been this far from expiry since 2012, a testament to limited storage levels and very impressive April cold. 

This was seen in our Morning Update, as even though overnight model guidance lost a bit of demand heating demand far above seasonal averages remains likely into the final week of April.