As a trader sitting at your desk on a Thursday morning, you have decided that 2005 was a year of rising prices fundamentally because supply struggled to meet demand in the short term. Your first new years resolution is to make sure that you are short a month ahead to two months ahead, the reason for this is that the market is now so used to being long at the point of delivery that when you actually get to delivery there are more sellers than buyers and so bargains can be picked up. The next piece of analysis you do is to establish which of the the five key markets moves first. Oil emissions gas power or coal. You immediately look at coal as a slow moving commodity with low volatility and accept that as coal is the predominant fuel source for plant in the UK power market, it is more likely to influence power prices. Emissions tends to be more reactionary to European prices. Oil and gas have always been linked, and nothing has changed here and then you look at power, and see that fundamentally the merit order is still nuclear, coal and gas and therefore in the summer the marginal plant is gas but the predominant price determinate will be coal prices.  You suspect that the Winters will be well bid, and this is an opportunity for you to sell at these high numbers. You see that Summer 07 is in backwardation to Summer 06, the curve looks out of kilter and as your first trade of 2006 you short (sell) Summer 06, you therefore start to sell Winter 06 as well to make April 06 annual comply with your curve, and this makes your Summer 07 look expensive and so you sell those as well. Not a large trade, because you know that if the front winter gets cold, everything will rise..............