New highs have been set across Europe in all commodity markets with carbon, gas power and oil all reaching new highs. All these products have some correlation with each other but the truth of the matter is that there is still a high demand for all them and no real increase in supply. Oil is a limited commodity and despite OPEC producing more oil than ever before, it is not enough to satiate the US demand over the holiday period. Gas is linked with oil prices, due to long term production contracts. Carbon is limited because governments have stated National Allocation Plans, and the belief is that these took so long to negotiate they are unlikely to be rejigged. Power is limited in supply with continental players having many plant on outage and so countries which are over supplied in the short term (e.g. The UK) divert their excess into the continental markets using the interconnector. Not surprisingly the big and immediate change is that the cost of buying these scarce products is becoming expensive and increasingly so. Companies which are exposed to power prices have to now measure and assess what effects this is having on their bottom line. Power prices are close to doubling in six months and any company hoping for a dramatic drop is in dreamland. Power prices are going to remain high until the supply issue in the prompt and in the other correlated markets changes.