Power prices rose in Winter 06 yesterday as Centrica admitted that return of Rough would be delayed by a couple of days. The reaction in the market was that this would make withdrawals in the Winter tighter. In reality this was an excuse to push the market, and this morning the bears are back to push Winter 06 below £68/MWh.

Ofgem the usual pariahs of doom have stated that the Summer as well as the Winter could be tight, specifically on gas reachig our shores. One has no doubt that there will be an element of tightness, but most of this is already priced in, with the spark spread for Win 06 at £3.50, and the Dark spread at £42.60, it is clear that gas prices are very high. There has been some heavy selling of the dark spread (selling power and buying coal) but much of this has been offset by emissions swings, causing the spread not to change that dramatically.

The market is relaxing before the end of a bank holiday and when Rough returns in two weeks time, then injections will be able to take place and before you know it the Monsoon May will convert back to summer, a reduction in prompt will occur and this may well drag the back end with it, particularly if traders wake up and see the gas price at a shade under 90p/th.