Editor's letter

Congratulations on surviving another year in the volatile energy markets! With office parties well and truly over and annual bonuses (hopefully still) in the bank, it's time to look ahead at what 2007 might bring.

Taking the pivotal oil markets as a guide, it would seem unlikely that prices anywhere in the complex are going to fall significantly this year. The traditionally conservative US Energy Information Administration expects WTI to average just above $65 a barrel (bbl) in 2007, slightly below last year's average of around $66/bbl, but well above the 2005 price of $56.49/bbl and the 2004 price of $41.44/bbl.

Meanwhile the Henry Hub price is expected to average $7.87 per thousand cubic feet (mcf) in 2007 up from $7.06/mcf in 2006. As our Special Report on natural gas discusses, storage capacity is a growing concern in the US, with some experts believing that new build is unlikely to take place early enough to alleviate price spikes if there are supply disruptions or a cold winter to hike demand in the coming months.

Our gas report also questions Russia's ability to supply what Europe is expecting in the short-term. More positive though are developments in European gas trading, particularly in Germany, which, as one expert commentator says, is finally beginning to look like a success story.

Also in this issue, we bring you a special feature looking at some of the most interesting structured deals to have taken place in the energy markets in recent months. The six deals we feature have all broken new ground in different areas and are a testament to the talent in this sector.