Prompt is trading at £24

Q4 07 is trading at £31.75

Q1 07 is trading at £41.40 assuming that a normal differential between Q4 and Q1 is £2+ for Q1 we can equate the £9.65 differential as circa £7.65 for carbon.

Outturn for Summer 07 is likely to be around £24.50 therefore including £7.65 for carbon (which is high because Caron prices are higher in the Winter than the Summer) we can say that Summer 08 should be trading at £32.15 if we then add on £1-2 for forward premium we can say that it is a price trading at around £33.15 - £34.15 is fair value.

Summer 08 is trading at around £35.50 and we are seeing more players happy to sell below £36 this suggests that it has further to fall.