Q3 is being bought up by players who are scared that the hot summer will cause some problems. It is assumed that British Energy is one of the biggest buyers, they have a vested interested. If the Summer proves to be very hot then they will have to turn their plant off anyway and so buying volume now makes sense. If it is cooler than expected then they will turn off their plant for maintenance and use the bought volume. Both situations will squeeze supply and force prices a little higher, and so if necessary they can sell into this strength.

The real problem is that many of the gas players will have a similar plan and if prices rise they will generate, with plenty of gas around the squeeze is less easily managed than in the past. Furthermore, if the Summer is not that hot then demand will remain low and players will be long power in a low demand period. It is understandable why July and August are trading at a premium to May but the premia is enough to suggest that the banks have turned into sellers and that over 4GW is riding on a BE, BarCap view of the market and it will be no surprise if BarCap attempt to push the market particularly if gas coal and oil prices remain low.