Weather, oil sanctions and European debt concerns were the pushers and pullers this month as energy markets responded to competing indicators. Volatility was the only constant. European debt crisis fears, a major driver of energy markets last year, remained a feature at the start of 2012. While oil did open the year up on the back of strong economic data from both the US and China, it retraced its steps on surprise US stockpile data combined with the Euro debt fears. Bearish indicators in the UK domestic market came from storage levels with storage facilities start-ing the year in injection mode (although high winds did impact on the ability of LNG cargoes to berth) and the unseasonable mild temperatures also fed through. With Europe facing the warmest winter in 30 years, coal burn has been weak and prompt physical coal prices lost around $1/tonne in value at the start of the month. Soft fuel prices combined to add pressure to power prices. On 6th January Winter 12 Baseload closed at £49.15/MWh and Winter 13 at £52.7/MWh while NBP Gas was offered at 66.10p/term for Winter 12 and 68.6p/therm for Winter 13. Fear of supply disruptions were the next bullish triggger with Iran threatening to shut the Strait of Hormuz, an important oil and LNG supply route, in response to West threatened sanctions over Iran’s nuclear build intentions. The European Union proposed a ban on Iranian crude imports to be phased in over six months and started lobbying other global parties to support the move, notably China. Iran, in turn, warned its Gulf Arab neighbours there would be consequences should they increase their own output in response. The markets wrestled with the bullish force of the Iranian threat and the bearish pull from Eurozone debt concerns which fed through to the currency markets. On January 13th, Standard and Poors downgraded 9 Eurozone countries. Positive economic indicators from China and the US did help to offset some of the European driven gloom. The Winter 13 gas contract remained unchanged week on week while the same contract in the power market gained £0.4/MWh. Saudia Arabia said in an interview that it hoped oil prices could stabilise around $100 for an aver-age of crudes worldwide. Towards the end of the month, statements from Iran suggesting it would cut off supplies ahead of the proposed sanctions and before EU countries could find alternative sources added heat to oil prices. While forecast and outturn cold weather also drove gas and coal prices which in turn added pressure to the power curve. On Friday 27th January, all NBP contracts climbed an average 5% as the UK got ready to face its coldest period this winter so far. And with much of mainland Europe experiencing a deep freeze, fuel and carbon prices on the continent added additional strength. Summer 12 closed the week at 57p/therm, Winter 12 at 69.55p/therm and Summer 13 at 62.9p/therm. In the power market Winter 12 closed at £52.05/MWh and Winter 13 at £55.9/MWh. Centrica Storage, the operator of Rough gas storage, announced a two week maintenance period for the first two weeks of February.