Focus has returned a little to prompt, with the gas market tightening marginally on fewer coal plant being around and stepped up injections into Rough. What traders have to weary of is that we have seen little fundamental activity for the last two weeks, and so players can over-hype what news is out there. No one can deny that a tightening was bound to take place, but it would be a fool to buy on the hopes of a squeeze. Players know the effects of a squeeze and will get long quickly. Those who were short last year will be quicker to get long than ever and in many cases will already be long.

It is much more likely that the market will ride through this tighteness to find that in a months time traders will not want to be as long as they are for September and October in 2006, and this will pull the winter down. Finally trade of the day is to buy October 06 @ £44.60 and sell April £48.10, this spread at £3.50 one would expect to reverse at some point. To give you an idea this time last year October 05 was trading at £44 and April and £51 (spread even wider) by the end of September the October 05 had moved down a few pounds but April was around £39. This is because April being far dated moves with Winter and so has Winter type volatility. October is the opposite it is a Winter month with low volatility, because it follows Summer.