Sometimes a market just gets it wrong. Last week predictions that this week would be a cold one, prompted gas players to buy up the prompt, this saw a 25p rise in February and March. Sellers retreated and buyers continued to justify the spend on the back of where prices has gone in the past. A traded burned is a trader that has learnt, and so many decided not to be short and caught. Only trouble is that they massively over bought, the system became hugely long and it started shedding its length during a cold period. This saw heavy selling and a subsequent 15p drop in a three days.

Some observant players will note that the curve rose last week, on the back of prompt activity but that the subsequent fall in the prompt has not been replicated in the curve. There is no doubt that players would prefer to buy the back end as oil and emissions worries kick in. The opportunities for traders, will be few and far between but when the market drops it will be worth picking up some length to manage the risk.