The turn of the calendar to 2025 kicked off what was considered the coldest stretch of the current winter season as several regions across the Lower 48 and Canada were displaying below normal temperatures.  In some cases, the daytime average never topped the zero mark and the demand for heating demand across both power and natural gas increased.  February rolled around and the first few days were filled with the commentary around Punxsutawney Phil seeing its shadow, which meant that there would be roughly six more weeks of winter ahead.  There is a lot of debate around this tradition and how a shadow can determine what Mother Nature is thinking but going off what transpired throughout February, the groundhog looks to be the money play as temperatures throughout the month plummeted.  This led to a bullish movement on the natural gas front given the storage levels across the country were diminishing at a rapid pace.

Figure 1 | Month HDD Accumulation by Year

The graph above represents the Total Average HDDs for the Lower 48 over the past three months where you can see that December 2024 hovered over the 10 year average line and sat above the previous year.  January represented the peak HDD accumulation going back to 2015, which indicates just how cold things were and as we discussed last month the impact to the natural gas consumption that led to storage withdrawals.