The whole curve shifted up yesterday on the back of more information coming out on the Gulf of Mexico and the suggestions that the effects of Hurricane Katrina are more widespread than originally thought. Perhaps increasingly worrying, is oil looked aggressively bid and the prospect of a fall is unlikely until the water subsides and a more accurate assessment of the damage can be made. In the short term, gas prices held at current levels with no real fears of supplies but the prompt months and Winter 05 rose siginifcantly to reflect rising fuel costs. Moreover emissions took their cue from oil and started to rise the suggestion being that if there is a need to burn more oil the costs and prices will spike dramtically, some of the buying of emissions is a hedge against this potential rise. In reality unless serious damage is done to the Gulf of Mexico then this will be a storm in a teacup. The big problem is the cost of freight if the US needs to import more oil, then the cost of freight will rise and the cost of coal and other freight dependent commodities will suffer. Much of the rise in prices last year was freight lead and perhaps traders are worried about last years rise coming on top of the increased fuel costs.