The scare of cold weather next week forced the market to jump on significant volumes. The whole curve shifted by as much as £1 - £1.50. With significant trading in Winter 07 which breached £40.10 for the first time this year. Summer 07 also moved upwards mainly on some spread trading in March which was heavily bought. Players predicting that Winter will come late and that some gas extraction from storage will be required next week, limiting options in March and even April and causing the risk premia to leak back into curve prices.

Interestingly spark spread activity was of interest to with day ahead trading at a healthy £8. but February through to Summer 07  trading at £4.25 (this is possible buy territory for many generators i.e. Switch the plant off, buy the power sell the gas). In Summer 08 and beyond the spread widens dramatically to £16.50 and this is most definitely a level that many players would happy lock in at.

One can see significant profit from selling the spread at £16.50 and buying it back at £4. An easy way to make £12MWh for doing nothing!