Emissions prices have pushed higher, at approximately 1 euro a day since the May 15th release of data. The reason for this is that there are a lack of sellers in the market. In reality, players believe that these sellers will never come to the market, this is plain wrong, no one gives away free money. The shorts are mainly power producers who can pass through costs, and so they want the price to go higher.

Eventually, the price will get to a point where those who are long will sell and make huge profits, the problem is that markets are not orderly and when those with length want to sell the market the price could gap and collapse. Powerisk still has a view that the longer the price stays at around €19 the more likely the price is to collapse to zero in 2007. Eventually the effects of the system being long will hit price.

The Germans have a chicken and egg situation which is inflating prices, does German power price increases cause the emissions market to rise, and if so do these rises, cause German power prices to rise. The latter makes sense the former is nothing but market manipulation and eventually they will be caught.