The market this week has seen some new highs, with the FTSE extending to beyond 6000 within gas trading at 2.50 and day ahead power hitting £200/MWh it is a very bullish week. Interestingly the curve has not really responded, it rose on the initial flurry but traders then sold into this strength and the Winter 06 has definitely looked over bought when above £65 and yet buyers seem to come in around £60. The word rangebound is something traders hate, because it starts to straight jacket the market, but Winter 06 is looking rangebound. For the slick you buy and £60 and sell at £65, but the incumbents the market collapse is just not forthcoming.

Perhaps surprisingly the one product which has fallen this week is Emissions, clearly as gas prices rise the need for emissions increases as players burn more coal to compensate. The maturity of the market is beginning to show because once the switch has been decided (i.e. to burn coal rather than gas) the fundamental decision is made, and so the size of the decision is irrelevant.