It is quite easy to follow the trader mentality and look at liquid markets. This means that a bit like an England Italy rugby match the players, congregate in a trading maul around the front season, and the prompt. The key drivers on these months are what traders are looking for. All traders are human and this means that their resources can be diverted away from the back end of the curve and this can cause some interesting opportunities.

For example, a simple look at the curve will show that Summer 07 is in contango with with Summer 06, and yet Winter 07 is in backwardation to Winter 07. This is suggests that there is a breakdown between 06 and 07 which is probably not fundamental. The big unknown for 2007 is the fact that power players will not be able to roll their emissions short and this means that potentially the physical settling of 2007 emissions market could be difficult, if players become short then expect this market to spike inexorably, the emissions longs hold the perfect squeeze position. It could be argued that traders have an opportunity now to trade long dated seasons, at a fair market price, at from a risk perspective this may well be a good thing.