This year’s widowmaker natural gas spread is not so scary

In the world of trading, a widowmaker is a term that refers to a trading strategy that can result in large profits but also catastrophic losses. The natural gas market has such a trade, which is well-known within the industry and has either made or broken traders willing to take the risk for the opportunity. The gas widowmaker is the NYMEX futures price spread between the next March and April on the calendar.  

The market’s comfort level with getting through the winter drives the focus on this spread, which is marked on the energy calendar as end of winter, which is March, and going into the start of storage injection season, which begins in April. This price spread between the end of winter and the start of summer can vary significantly based on what each trader can see within their own crystal ball. The further away from March/April they are at the time they place their bet on the spread, the higher the risk or reward.  

The chart below shows the historical NYMEX futures price for March 2025 (navy line) and April 2025 (yellow line) since the end of last winter. The green bar measures this year’s widowmaker spread between the two contracts. 

The price spread for the Mar/Apr 2025 widowmaker hasn’t been as extreme as in past years but has still shown some volatility. The spread starts on the left side of the chart on April 1 at $0.19/MMBtu, peaking (so far) on June 11 at $0.31/MMBtu (arrow A). The March end of winter price premium to the April start of summer price has declined since then as the overall market became more comfortable fundamentally that the supply/demand balance and amount of gas in storage would likely be sufficient to get through the winter.  

Earlier this month, the Mar/Apr spread turned negative, meaning the price for March was actually less expensive than April.  

While all of this is interesting, end-use customers needing gas in March and April next year need to be aware that the widowmaker spread is only a measurement of perceived risk at a point in time. As of today, the picture looks rosy for buyers, and the market is confident that adequate supply and storage is available to get through the winter. But buyers should also keep in mind that it is only mid-December, and there are still three and a half months before the end of March.  

Winter weather will ultimately play a part in determining the direction of March and April’s (and next summer’s) prices. The past two winters have been two of the warmest on record, averaging 1,516 Bcf of withdrawals out of storage. The two winters prior to that (2020/2021 and 2021/2022) averaged 2,122 Bcf of withdrawals.  

Winter weather has a lot to do with the prices for the upcoming spring and summer. If you aren’t willing to place a bet on winter weather for your gas prices in 2025, this could be an opportunity to layer in some protection for the portion for which you want price risk removed. They don’t call it the widowmaker spread for nothin.’