April 2012 Energy Index - Bord Gáis Energy

Bord Gáis Energy IndexAprIl 2012

Energy Index Graph

Data

31 January 2009 92.1028 February 2009 87.77

31 March 2009 76.8630 April 2009 77.6331 May 2009 84.37

30 June 2009 90.8131 July 2009 88.62

31 August 2009 88.3530 September 2009 85.76

31 October 2009 92.3930 November 2009 94.8231 December 2009 100.00


31 March 2010 104.5730 April 2010 111.2231 May 2010 110.49

30 June 2010 111.6431 July 2010 111.05


31 October 2010 112.6430 November 2010 121.6731 December 2010 135.86


31 March 2011 146.5130 April 2011 147.7631 May 2011 140.73

30 June 2011 134.5431 July 2011 138.57


31 October 2011 136.1431 November 2011 143.88

31 December 2011 143.22

31 January 2012 144.43

31 February 2012 156.81

12 Month Rolling Average

31 October 2009 87.80

30 November 2009 87.15

31 December 2009 88.29

31 January 2010 88.92

28 February 2010 90.20

31 March 2010 92.51

30 April 2010 95.31

31 May 2010 97.49

30 June 2010 99.22

31 July 2010 101.09

31 August 2010 102.82

30 September 2010 104.97

31 October 2010 106.66

30 November 2010 108.89

31 December 2010 111.88

31 January 2011 114.76

28 February 2011 117.91

31 March 2011 121.41

30 April 2011 124.45

31 May 2011 126.97

30 June 2011 128.88

31 July 2011 131.18

31 August 2011 133.64

30 September 2011 135.59

31 October 2011 137.54

31 November 2011 139.53

31 December 2011 140.15

31 January 2012 141.01

31 February 2012 142.38

Oil Graph Data

31 January 2009 65.78

28 February 2009 67.03

31 March 2009 68.43

30 April 2009 70.72

31 May 2009 85.34

30 June 2009 90.70

31 July 2009 92.57

31 August 2009 89.31

30 September 2009 86.74

31 October 2009 93.84

30 November 2009 96.36

31 December 2009 100.00

31 January 2010 94.62

28 February 2010 104.90

31 March 2010 112.38

30 April 2010 121.16

31 May 2010 111.65

30 June 2010 112.54

31 July 2010 110.19

31 August 2010 108.17

30 September 2010 111.13

31 October 2010 109.88

30 November 2010 121.18

31 December 2010 130.36

31 January 2011 135.62

28 February 2011 149.07

31 March 2011 152.09

30 April 2011 156.15

31 May 2011 149.41

30 June 2011 142.55

31 July 2011 149.27

31 August 2011 146.57

30 September 2011 140.51

31 October 2011 144.47

31 November 2011 151.0531 December 2011 152.25

31 January 2012 155.87

31 February 2012 169.16


Bord GáIs EnErGy IndEx rEmAIns HIGH In AprIlIndex up 6% In 2012

oIlHaving stabilised in March, the price of a barrel of crude oil started to decline in April, falling 2% in euro terms. According to the International Energy Agency, ‘the tide of remorseless market tightening’ that has seen demand outstrip supply and stocks levels being eroded over the prior ten quarters (Q3 09 to Q4 11), finally turned in Q1 2012 due to an increase in OPEC crude supply and sluggish oil demand. There is now growing confidence that the key OPEC producers can step into the breach and replace lost Iranian oil volumes as OPEC’s output of oil in April hit levels not seen since September 2008.

In addition to oil market easing, improving relations between the West and Iran following ‘constructive’ talks on the Persian State’s disputed nuclear programme put additional downward pressure on oil prices, along with a view from Israel’s military chief who stated that Iran will not decide to produce a nuclear bomb.

Disappointing economic releases from China, renewed fiscal solvency concerns about Spain and an unwillingness by the Federal Reserve in the US to provide additional stimulus to boost US growth, all weighed on oil in April.

oVErAll sUmmAry:Following months of steadily rising wholesale fuel prices, the April Bord Gáis Energy Index stabilised at 154.

In euro terms, having hit a month end closing high in March, oil prices finally receded in April as both market tightening and geopolitical tensions eased.

Supply constraints, storage withdrawals and cool weather supported UK Day-ahead gas prices and a weaker euro amplified this movement.

1 mth 0% 3 mth 6% 12 mth 4%

1 mth -2% 3 mth 6% 12 mth 6%

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100

140

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Poin

ts

Bord Gáis Energy Index 12 Month Rolling Average

Jan-12 Apr-12Oct-11Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-09

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100

140

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Poin

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Oct-11 Jan-12 Apr-12Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-09

Bord Gáis Energy Index (dec 31st 2009 = 100)

Euro consumers of Brent crude oil will welcome the news that in April, the first drop in the monthly price of oil, in euro terms, since September 2011 was recorded. Lower oil prices coincided with news that after 30 months of oil market tightening, where global demand outstripped supply, relief finally arrived in the first quarter of 2012. This is a result of OPEC pumping more oil and demand waning as rising prices and the weakening economic backdrop undermined consumer’s appetite for oil. However, should the euro continue to weaken versus the US Dollar, European consumers may not feel all or any benefits of future Brent crude oil price falls. Using April month end closing prices, should the euro weaken to 1.20 versus the US Dollar because of renewed solvency concerns in Europe, oil prices would have to fall $11 or 10% just to maintain the current euro price of a barrel of Brent crude.

oil Index

*Index adjusted for currency movements.Data Source: ICE

Natural Gas Graph

Data

31 January 2009 195.04

28 February 2009 156.23

31 March 2009 99.24

30 April 2009 92.78

31 May 2009 87.00

30 June 2009 87.56

31 July 2009 76.34

31 August 2009 69.43

30 September 2009 61.72

31 October 2009 77.55

30 November 2009 83.21

31 December 2009 100.00

31 January 2010 125.88

28 February 2010 114.44

31 March 2010 101.67

30 April 2010 106.04

31 May 2010 130.73

30 June 2010 145.29

31 July 2010 157.48

31 August 2010 145.96

30 September 2010 132.67

31 October 2010 148.57

30 November 2010 167.11

31 December 2010 204.87

31 January 2011 188.31

28 February 2011 179.74

31 March 2011 194.03

30 April 2011 181.39

31 May 2011 184.99

30 June 2011 183.36

31 July 2011 179.36

31 August 2011 172.82

30 September 2011 180.07

31 October 2011 180.16

31 November 2011 191.53

31 December 2011 189.94

31 January 2012 184.35

31 February 2012 221.68

Coal Graph Data

31 January 2009 102.58

28 February 2009 93.02

31 March 2009 82.80

30 April 2009 78.58

31 May 2009 76.19

30 June 2009 76.68

31 July 2009 81.48

31 August 2009 84.15

30 September 2009 83.00

31 October 2009 86.26

30 November 2009 88.54

31 December 2009 100.00

31 January 2010 105.77

28 February 2010 95.28

31 March 2010 95.51

30 April 2010 108.11

31 May 2010 125.06

30 June 2010 132.03

31 July 2010 121.85

31 August 2010 123.28

30 September 2010 121.29

31 October 2010 121.83

30 November 2010 150.34

31 December 2010 159.48

31 January 2011 148.31

28 February 2011 149.34

31 March 2011 153.91

30 April 2011 148.29

31 May 2011 145.75

30 June 2011 144.90

31 July 2011 147.62

31 August 2011 149.65

30 September 2011 156.20

31 October 2011 145.04

31 November 2011 142.82

31 December 2011 145.65

31 January 2012 134.66

31 January 2012 125.54

Electricity Graph Data

31 January 2009 127.36

28 February 2009 117.38

31 March 2009 89.56

30 April 2009 88.58

31 May 2009 82.33

30 June 2009 91.74

31 July 2009 83.00

31 August 2009 89.26

30 September 2009 87.28

31 October 2009 91.82

30 November 2009 93.65

31 December 2009 100.00

31 January 2010 105.32

28 February 2010 98.50

31 March 2010 90.42

30 April 2010 93.24

31 May 2010 105.19

30 June 2010 104.88

31 July 2010 106.05

31 August 2010 105.66

30 September 2010 109.05

31 October 2010 112.69

30 November 2010 115.75

31 December 2010 136.21

31 January 2011 123.78

28 February 2011 120.12

31 March 2011 129.24

30 April 2011 127.27

31 May 2011 118.10

30 June 2011 112.46

31 July 2011 112.53

31 August 2011 118.86

30 September 2011 117.61

31 October 2011 114.14

31 November 2011 123.77

31 December 2011 119.63

31 January 2012 117.47

31 February 2012 125.14


CoAlEuropean coal prices hit a 19 month low in April due to little or no demand for coal in the Atlantic basin. Following restocking by major drawers of imported coal (UK, Germany for instance) in 2011 and then a relatively mild winter in Q4 2011 which extended into January, Europe is heavily stocked currently. In addition, with slower industrial activity across major euro zone economies, there has been a reduction in coal burn in the region and these heavy stock levels have not been eroded.

Supplies to Europe also remain healthy with ample supplies of coal reportedly available from Colombia and the US. Columbian coal exports are expected to increase this year as producers continue to improve output from mines and the abundance of shale gas in the US means that it is willing to export coal to find value in the global market.

With both India and China apparently refraining from any large coal purchases, prices globally remain depressed.

ElECTrICITyIrish wholesale electricity prices were 3% higher in April compared to March. The dominant influence on Irish wholesale electricity prices is the cost of gas in the UK and during April, the average Day-ahead UK gas price increased 6% in euro terms. As gas is used to power the majority of electricity generating plants in Ireland, the wholesale electricity price is highly correlated to movements in UK gas prices.

In addition to rising gas prices, the intermittent nature of wind also nudged wholesale prices higher. During the month, as a result of the high wind speeds and large volumes of wind power being produced, there were periods when traditional fossil fuel generators were turned off, as they were not required to produce electricity to meet the country’s demand. As wind speeds eased, the thermal generators were called on once again to produce and the costs to re-commence the production of electricity had to be recouped in the wholesale price, which in turn put upward pressure on wholesale prices.

nATUrAl GAsIn euro terms, the average monthly Day-ahead UK gas price in April was 6% higher than its March equivalent. A weaker euro versus the British Pound (in April the euro weakened by approximately 2% versus the British Pound), amplified the increase in the monthly average Day-ahead price.

Despite moving into the gas market’s summer on 1 April and the official end of the winter period, Day-ahead gas prices were well supported in the month and traded consistently around the 60p a therm level. The UK system found itself consistently short in the month as supply constraints materialised sporadically in some of the main sources of gas supply to the UK. These supply constraints and storage withdrawals supported prices.

On the demand side, cool temperatures supported domestic demand for gas to heat homes throughout the UK.1 mth 6% 3 mth 13% 12 mth 15%

1 mth -7% 3 mth -12% 12 mth -21%

1 mth 3% 3 mth 4% 12 mth -3%

Poin

ts


100

150

200

250

Poin

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95

150

205

260

Poin

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100

140

180

natural Gas Index

Coal Index

Electricity Index

*Index adjusted for currency movements.Data Source: Spectron Group

*Index adjusted for currency movements.Data Source: ICE

Data Source: SEMO

EUR/USD

31 January 2009 1.283

28 February 2009 1.272

31 March 2009 1.323

30 April 2009 1.321

31 May 2009 1.412

30 June 2009 1.405

31 July 2009 1.424

31 August 2009 1.434

30 September 2009 1.464

31 October 2009 1.474

30 November 2009 1.498

31 December 2009 1.433

31 January 2010 1.389

28 February 2010 1.360

31 March 2010 1.353

30 April 2010 1.327

31 May 2010 1.230

30 June 2010 1.226

31 July 2010 1.305

31 August 2010 1.269

30 September 2010 1.362

31 October 2010 1.392

30 November 2010 1.304

31 December 2010 1.337

31 January 2011 1.370

28 February 2011 1.379

31 March 2011 1.419

30 April 2011 1.483

31 May 2011 1.437

30 June 2011 1.451

31 July 2011 1.438

31 August 2011 1.441

30 September 2011 1.345

31 October 2011 1.395

31 November 2011 1.3446

31 December 2011 1.2961

31 January 2012 1.3084

31 January 2012 1.3325

EUR/GBP

31 January 2009 0.887

28 February 2009 0.886

31 March 2009 0.925

30 April 2009 0.894

31 May 2009 0.874

30 June 2009 0.853

31 July 2009 0.853

31 August 2009 0.881

30 September 2009 0.914

31 October 2009 0.896

30 November 2009 0.913

31 December 2009 0.888

31 January 2010 0.867

28 February 2010 0.893

31 March 2010 0.891

30 April 2010 0.868

31 May 2010 0.846

30 June 2010 0.819

31 July 2010 0.831

31 August 2010 0.827

30 September 2010 0.866

31 October 2010 0.869

30 November 2010 0.837

31 December 2010 0.857

31 January 2011 0.854

28 February 2011 0.849

31 March 2011 0.883

30 April 2011 0.888

31 May 2011 0.874

30 June 2011 0.903

31 July 2011 0.875

31 August 2011 0.885

30 September 2011 0.860

31 October 2011 0.8615

31 November 2011 0.8562

31 December 2011 0.8334

31 January 2012 0.8302

31 February 2012 0.8372


Fx rATEsDuring April, the euro weakened against both the US Dollar and the British Pound, despite the fact that the UK has suffered it’s first double-dip recession since the 1970’s. A weaker euro means that any falls in non-euro priced commodities are not fully realised and any increases are magnified as European buyers have to pay more.

The euro’s weakness reflects fresh solvency concerns about Spain, weaker than expected economic indicators and political uncertainty associated with elections in France and Greece. The stress Europe is under is reflected in the weakening currency but also in falling European equities and rising 10 Year yields on Italian, Spanish and to a lesser extent, French bonds.

Europe’s economic weakness contrasts with the US where it is expected that the recovery will continue and the economy will grow by 2.5% this year.

mArkET oUTlook:Oil prices will stay high as long as geopolitical uncertainties remain. However, it would appear that the latest round of sanctions against Iran is having an effect given reports that Iran’s storage facilities of crude oil on land and sea are full, which suggests that Iranian exports and crucial oil revenue are falling. This pressure may produce some progress at the second round of talks between Iran and the so-called P5+1 group scheduled for 23 May. Any progress over Iran’s disputed nuclear programme may push oil prices lower. The market will continue to observe developments in global oil supply, demand and inventory changes to check for further evidence of market loosening.

The reignition of fiscal solvency concerns in Europe as well as political uncertainties and economic weakness could also weigh on oil prices but euro buyers may not feel these gains fully, should the currency weaken amid European market stress.

Despite coal’s tremendous global consumption growth of 70% between 2000 and 2010, coal for power generation in Europe, its principal market, has been in a state of decline in the two decades since 1990. In the short-term, ample European stocks and the advent of Europe’s summer will continue to weigh on coal prices. As well as developments in the price of oil, weather and supplies of gas to the UK from around the globe and from domestic fields will continue to influence wholesale gas prices.

For more information please contact: Fleishman-Hillard — Aidan mclaughlin — 085 749 0484 Bord Gáis Energy — Christine Heffernan — 087 050 5555

rE-wEIGHTInG oF Bord GáIs EnErGy IndEx:Following the SEAI’s 2009 review of energy consumption in Ireland, released in Q4 2010, there was a 9.3% drop in overall energy consumption. The most notable drop of 1.39% was in oil consumption in the form of gasoline and diesel. This reflects the economic downturn experienced at the time. The share of natural gas and electricity increased by 0.63% and 0.57% respectively. An increase in the use of renewables and peat, at the expense of coal in electricity generation was also observed. As a result the Bord Gáis Energy Index has been reweighted to reflect the latest consumption data. This has had a minimal effect on the overall shape of the Index, but may indicate future trends.

disclaimer:The contents of this report are provided solely as an information guide. The report is presented to you “as is” and may or may not be correct, current, accurate or complete. While every effort is made in preparing material for publication no responsibility is accepted by or on behalf of Bord Gáis Eireann, the SEMO, ICE Futures Europe, the Sustainable Energy Authority of Ireland or Spectron Group Limited (together, the “Parties”) for any errors, omissions or misleading statements within this report. No representation or warranty, express or implied, is made or liability accepted by any of the Parties or any of their respective directors, employees or agents in relation to the accuracy or completeness of the information contained in this report. Each of the Parties and their respective directors, employees or agents does not and will not accept any liability in relation to the information contained in this report. Bord Gáis Eireann reserves the right at any time to revise, amend, alter or delete the information provided in this report.

1 mth -1% 3 mth 1% 12 mth -11% EUrUsd

1 mth -2% 3 mth -2% 12 mth -8% EUrGBp

Oct-11 Jan-12 Apr-12Jul-11Apr-11Jan-11Oct-10Jul-10Apr-10Jan-10Oct-09Jul-09Apr-09Jan-090.60

0.80

1.00

1.20

1.40

1.60

Fx rates

Electricity 18.40%

Coal3.16%

Gas 13.52%

Oil 64.93%

Date post:	29-May-2015
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April 2012 Energy Index - Bord Gáis Energy

Economy & Finance