The Bord Gáis Energy Index fell by 7% in May with falling oil, gas and wholesale Irish Electricity Prices.

1. Bord Gáis Energy Index
MAY 2012

2. Bord Gáis Energy Index
MAY 2012
DROP IN OIL PRICES PUSHES ENERGY INDEX LOWER IN MAY
Bord Gáis Energy Index (Dec 31st 2009 = 100)
12 Month Rolling
Average
31 October 2009 87.80
Bord Gáis Energy Index
30 November 2009 87.15
12 Month Rolling Average
180 31 December 2009
31 January 2010
88.29
88.92
OVERALL SUMMARY:
28 February 2010 90.20
31 March 2010 92.51
30 April 2010
31 May 2010
95.31
97.49
The Bord Gáis Energy Index fell 7% in May
30 June 2010 99.22 with falling oil, gas and wholesale Irish
140 31 July 2010
31 August 2010
101.09
102.82 electricity prices.
Points
30 September 2010 104.97
31 October 2010
30 November 2010
106.66
108.89
As the markets nervously assess the future of
31 December 2010 111.88 the European Union and the uncertain global
31 January 2011 114.76
100 28 February 2011 117.91 economic and political repercussions of the
current regional crisis, money managers
31 March 2011 121.41
30 April 2011 124.45
31 May 2011
30 June 2011
126.97
128.88
have begun channelling funds away from
31 July 2011 131.18
commodities whose strength is determined
60
31 August 2011 133.64
30 September 2011 135.59 in part by a positive global economic outlook.
31 October 2011 137.54
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
31 November 2011 139.53
31 December 2011 140.15
31 January 2012 141.01
31 February 2012 142.38
1 Mth -7% 3 Mth -10% 12 Mth 1%
Oil, in US Dollar terms, fell 15% in May, the largest monthly price fall in 2 years, as the markets suffered major stress under the
political and economic uncertainties in Europe, speculation that growth in the US could slow and on further evidence of the
evolving Chinese slowdown. These stresses and concerns eroded market estimates of future oil demand in May and prices
subsequently fell. Tellingly, money managers and other large funds appeared to have lost their confidence in the global
recovery story as they have reportedly reduced their bullish US oil bets to a 20 month low. Although talks between Iran and
the UN P5+1 in Baghdad during the month failed to make any progress, tensions over the disputed Iranian nuclear programme
did ease in May. However, a UN report reminded the world that the issue has not gone away given that Iran is reportedly still
actively enriching uranium and engaged with its nuclear programme.
Oil Index OIL
The price of a barrel of oil fell steadily during
180 May from $119.47 to $101.87 (nearly $18) under
the combined weight of political uncertainty in
Europe, global economic weakness, increased
oil supplies from OPEC and easing concerns
over Iran’s nuclear programme.
140
Despite some positive economic releases from
Points
Germany and the US, the global economic
picture that strongly emerged during May is
100 one of weakness following releases indicating
that globally, retail sales are falling, business
activity is slowing, jobs are not being created
in the amounts expected and manufacturing is
60 contracting. Because of the fragile economic
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
situation, and high prices, demand for oil in
*Index adjusted for currency movements. the US, Europe and China is soft. At the same
Data Source: ICE
time, oil supplies remain healthy, particularly
from OPEC countries, who have collectively
increased output for seven months running
1 Mth -9% 3 Mth -11% 12 Mth 2%
and who are producing 3 million barrels a day
more now than a year earlier. This increased
supply and soft demand helped to push Brent
crude prices lower.
Talks between Iran and the UN P5+1 group
in Baghdad on May 23rd helped to continue
to ease tensions despite not reaching any
agreement. However, a report from the UN
reminded the world that this issue remains
unresolved following its claim that Iran has
doubled its stock of enriched uranium and that
the UN cannot give assurances that Iran is not
concealing nuclear activity at sites which their
inspectors have not been allowed access to.

3. Bord Gáis Energy Index
MAY 2012
Natural Gas Index NATURAL GAS
Natural
Gas Graph
In euro terms, the average monthly Day-ahead
250 UK gas price in May was 3% lower than its April
Data
31 January 2009 195.04
28 February 2009
31 March 2009
156.23
99.24
equivalent.
30 April 2009 92.78
31 May 2009
30 June 2009
87.00
87.56 UK gas prices were supported at the start of
200 May and traded at about 61p a therm due to
31 July 2009 76.34
31 August 2009 69.43
30 September 2009 61.72
31 October 2009
30 November 2009
77.55
83.21 the erosion of high stock levels during April,
processing plant outages which reduced gas
31 December 2009 100.00
31 January 2010 125.88
Points
28 February 2010 114.44
supplies from Norway to the UK, and a cold start
150
31 March 2010 101.67
30 April 2010 106.04
to the month.
31 May 2010 130.73
30 June 2010 145.29
31 July 2010 157.48
31 August 2010 145.96
30 September 2010
31 October 2010
132.67
148.57
However, prices started to decline mid month
30 November 2010 167.11
as healthy supplies of gas were dispatched from
31 December 2010
31 January 2011
28 February 2011
204.87
188.31
179.74
100 the LNG terminals and Norwegian gas flows
31 March 2011 194.03
30 April 2011
31 May 2011
181.39
184.99 resumed after scheduled maintenance. Warmer
weather and falling demand also weighed on
30 June 2011 183.36
31 July 2011 179.36
50
31 August 2011 172.82
30 September 2011
31 October 2011
180.07
180.16 wholesale Day-ahead gas prices.
31 November 2011 191.53
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
Despite fears that seaborne gas supplies to the
31 December 2011 189.94
31 January 2012 184.35
*Index adjusted for currency movements.
UK would dry up, it is estimated that May will
31 February 2012 221.68
Data Source: Spectron Group
record the highest level of LNG imports since
last October. Despite this rise, the volume of
1 Mth -3% 3 Mth -8% 12 Mth 10% LNG gas delivered in May 2012 is estimated to be
30% lower than in May 2011. The UK is currently
benefiting from the seasonal decline in gas
demand in Japan and South Korea.
Coal Index
Coal
Coal Graph 260 In US Dollar terms, European coal prices
continued to fall in May. However, because of the
Data
weakening euro, in euro terms, the front month
31 January 2009 102.58
28 February 2009 93.02
31 March 2009 82.80
30 April 2009 78.58
coal price increased 4% month on month.
205
31 May 2009 76.19
30 June 2009 76.68
31 July 2009
31 August 2009
81.48
84.15
Coal is finding some support from the power
30 September 2009
31 October 2009
83.00
86.26 generation sector as healthy European dark
power spreads means that it is economical to
Points
30 November 2009 88.54
31 December 2009 100.00
150 burn coal across Europe to produce cheaper
31 January 2010 105.77
28 February 2010 95.28
31 March 2010 95.51
30 April 2010
31 May 2010
108.11
125.06
electricity. However, warmer weather, increased
30 June 2010
31 July 2010
132.03
121.85 renewable generation capacity (which is
displacing thermal generation such as coal)
31 August 2010 123.28
95
30 September 2010 121.29
and weakening economic activity have been
31 October 2010 121.83
30 November 2010 150.34
31 December 2010 159.48
31 January 2011
28 February 2011
148.31
149.34
moderating factors.
31 March 2011 153.91
30 April 2011 148.29
The Atlantic basin continues to be well supplied
40
31 May 2011 145.75
30 June 2011
31 July 2011
144.90
147.62 by healthy Columbian and US imports.
Incremental supplies from South Africa and
31 August 2011 149.65
30 September 2011 156.20 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
Russia are also pushing down European
31 October 2011 145.04
31 November 2011 142.82
31 December 2011 145.65
*Index adjusted for currency movements.
31 January 2012
31 January 2012
134.66
125.54
Data Source: ICE
benchmark prices. With abundant shale gas
displacing coal in the US, coal demand to fuel
electricity generation is set to tumble to levels
1 Mth 4% 3 Mth -2% 12 Mth -16% not seen since 1984 and the displaced US coal is
finding its way to the European markets.
Electricity Index ELECTRICITY
Irish wholesale electricity prices were 5%
180 lower in May compared to April. As the
majority of power produced on the island of
Ireland is generated by burning gas, a 3% fall
in the average monthly wholesale Day-ahead
UK gas price in euro terms put downward
140 pressure on the cost to produce electricity in
Ireland in May.
Points
In addition to falling wholesale gas prices,
relatively cheap coal (in USD terms, the
100 monthly coal futures price has fallen 30%
since September 2011) and carbon prices
put additional pressure on Irish wholesale
electricity prices as coal plants on the island
of Ireland produced relatively cheap power in
60 good quantities.
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
Data Source: SEMO
Finally, wholesale prices are under a little
pressure with the arrival of summer and peak
power demand is starting to erode slowly
with warmer weather and extended periods
1 Mth -5% 3 Mth -8% 12 Mth -2% of daylight.

4. Bord Gáis Energy Index
MAY 2012
FX Rates FX RATES
31 January 2009
EUR/USD
1.283 31 January 2009
EUR/GBP
0.887 During May, the euro continued to weaken
1.60
28 February 2009
31 March 2009
1.272
1.323
28 February 2009
31 March 2009
0.886
0.925 versus the US Dollar and British Pound
30 April 2009 1.321
30 April 2009
31 May 2009
0.894
0.874
as political uncertainty in Greece and the
vulnerability of the European financial
31 May 2009 1.412
30 June 2009 0.853
1.40
30 June 2009 1.405
31 July 2009 0.853
31 July 2009
31 August 2009
1.424
1.434
31 August 2009
30 September 2009
0.881
0.914
system weighed heavily on the currency.
30 September 2009 1.464 31 October 2009 0.896
31 October 2009 1.474 30 November 2009 0.913 The euro performed badly versus the
1.20
30 November 2009
31 December 2009
1.498
1.433
31 December 2009
31 January 2010
28 February 2010
0.888
0.867
0.893
British Pound despite weaknesses in
the UK as evidenced by poor retail sales
31 January 2010 1.389
31 March 2010 0.891
28 February 2010 1.360
and industrial production numbers, less
30 April 2010 0.868
1.00
31 March 2010 1.353
31 May 2010 0.846
30 April 2010 1.327
optimistic growth forecasts and revisions
30 June 2010 0.819
31 May 2010 1.230
31 July 2010 0.831
30 June 2010 1.226
to the depth of the current UK recession.
31 August 2010 0.827
31 July 2010 1.305
30 September 2010 0.866
0.80
31 August 2010
30 September 2010
1.269
1.362
31 October 2010
30 November 2010
0.869
0.837 Versus the British Pound, the euro has
weakened to levels not seen since Sept
31 October 2010 1.392 31 December 2010 0.857
30 November 2010 1.304 31 January 2011 0.854
28 February 2011 0.849
2008.
0.60
31 December 2010 1.337
31 January 2011 1.370 31 March 2011 0.883
28 February 2011 1.379 30 April 2011 0.888
31 March 2011 Jan-09 Apr-09 Jul-092011Oct-09 0.874
1.419
31 May
30 June 2011
Jan-10 Apr-10 Jul-10
0.903
Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 During the month, the US Dollar
strengthened against nearly all of its most-
30 April 2011 1.483
31 July 2011 0.875
31 May 2011 1.437
31 August 2011 0.885
30 June 2011
31 July 2011
1.451
1.438
30 September 2011
31 October 2011
0.860
0.8615
traded peers as market stress increased
31 August 2011
30 September 2011
1.441
1.345
31 November 2011 0.8562 the appeal of safe haven investments
1 Mth -7% 3 Mth -7% 12 Mth -14% EURUSD
31 December 2011 0.8334
31 October 2011
31 November 2011
1.395
1.3446
31 January 2012
31 February 2012
0.8302
0.8372
such as the US Dollar, and US and German
31 December 2011 1.2961 government bonds. This came at the
1 Mth -2%
31 January 2012
31 January 2012
1.3084
1.3325
3 Mth -4% 12 Mth -8% EURGBP expense of commodities, global equities
and so-called peripheral European bonds.
A stronger US Dollar tends to reduce the
appeal of oil and puts additional pressure
on the commodity.
Market Outlook:
With oil production from OPEC countries at elevated levels not seen since October 2008 and demand destruction in Europe
and the US, and with muted oil demand growth in China, it is estimated that the oil market is currently oversupplied by
around 500,000 barrels a day. As a result, OECD oil stocks are now rising and some of the nervousness which drove price
to record highs in March is receding.
However, geopolitical risks are still a cause of concern and the markets will pay close attention to the scheduled talks
between Iran and the UN P5+1 in Moscow on the 18th and 19th of June to see if progress can be made on Iran’s disputed
nuclear programme. The precise impact on physical oil supplies once the expected European embargo on Iranian crude
takes effect on 1 July is also very much unknown and has the potential to keep oil prices high. The spate of unplanned
stoppages currently afflicting non-OPEC supply is also a concern as are the recent events in Argentina where the government
expropriated a Spanish oil and gas company’s assets. The Japanese nuclear moratorium and the summer crude burn in
exporting countries add another layer of uncertainty as does the ongoing economic situation in Europe and whether China
experiences a hard or soft landing.
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 Oil 64.93%
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 Gas
electricity increased by 0.63% and 0.57% respectively. An increase in 13.52%
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. Electricity Coal
This has had a minimal effect on the overall shape of the Index, but 18.40% 3.16%
may indicate future trends.
For more information please contact: Fleishman-Hillard — Aidan McLaughlin — 085 749 0484
Bord Gáis Energy — Christine Heffernan — 087 050 5555
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