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November 2011 Energy Index - Bord Gáis Energy
 

November 2011 Energy Index - Bord Gáis Energy

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Overall: An increase in both oil and gas prices drove the Bord Gáis Energy Index 4% higher for the month of November. A weakening of the euro due to uncertainty about the future of the single ...

Overall: An increase in both oil and gas prices drove the Bord Gáis Energy Index 4% higher for the month of November. A weakening of the euro due to uncertainty about the future of the single currency compounded the effect. The lingering threat of a double dip recession continues to be a major influence on the movements in the index.



The index, which now stands at 143, is 17% higher than it was in November 2010.



The following are the key trends recorded for the month of October:



Oil: The oil element of the Index was up 5% to 151. Month-on-month oil prices were relatively unchanged in US dollar terms but as the euro weakened relative to the dollar, the euro price of a barrel of oil increased by 5%. The price of oil was supported by concerns over possible future supply disruption as a number of events occurred in oil producing regions.



Natural Gas: The natural gas element of the Index was up 6% to 191. Prices fluctuated in the first half of the month as consumption varied due to changeable weather and unstable UK production was replaced by increased flows of gas from Norway.



Coal: The coal element of the Index was down 1% to 142. Coal prices fell in the month due to a combination of subdued demand; healthy stockpiles; milder weather in Europe and uncertainty surrounding economic growth.



Electricity: The electricity element of the Index was up 3% to 121. A major contributory factor to the rise was the unavailability of imported power, because the electricity interconnector between Ireland and the UK was on outage for repairs. As a consequence, Ireland had to rely on its own generation fleet to meet demand and less efficient generators were called into production. Furthermore, thermal plants were forced out of the system temporarily on several days because of high winds, giving rise to additional start-up costs when they were subsequently required to provide supply.

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    November 2011 Energy Index - Bord Gáis Energy November 2011 Energy Index - Bord Gáis Energy Document Transcript

    • Bord Gáis Energy Index NOVEMBER 2011G29238 BGE Energy Index Nov 2011 JJ.indd 1 02/12/2011 15:02
    • Bord Gáis Energy Index NOVEMBER 2011 BORD GÁIS ENERGY INDEX INCREASES 4% IN NOVEMBER - INCREASES IN BOTH OIL AND GAS PUSH INDEX HIGHER – Bord Gáis Energy Index (Dec 31st 2009 = 100) OVERALL SUMMARY: 12 Month An increase in both oil and gas prices Energy Index Graph Bord Gáis Energy Index Rolling Average 12 Month Rolling Average 180 Data 31 October 2009 87.80 31 January 2009 28 February 2009 92.10 87.77 30 November 2009 31 December 2009 87.15 88.29 drove the Bord Gáis Energy Index higher for November. A weakening 31 March 2009 76.86 30 April 2009 77.63 31 January 2010 88.92 31 May 2009 84.37 28 February 2010 90.20 of the euro due to the uncertainty 30 June 2009 90.81 31 March 2010 92.51 31 July 2009 88.62 31 August 2009 88.35 30 April 2010 95.31 about the future of the single currency 140 30 September 2009 85.76 31 May 2010 97.49 31 October 2009 92.39 30 June 2010 99.22 compounded the effect of these price 30 November 2009 94.82 31 December 2009 100.00 31 July 2010 101.09 Points 31 January 2010 99.62 31 August 2010 102.82 28 February 2010 31 March 2010 103.17 104.57 30 September 2010 31 October 2010 104.97 106.66 rises to leave the index up 4% for the month. 30 April 2010 111.22 31 May 2010 110.49 30 November 2010 108.89 30 June 2010 111.64 31 December 2010 111.88 100 31 July 2010 111.05 31 August 2010 109.16 31 January 2011 114.76 30 September 2010 111.50 28 February 2011 117.91 31 October 2010 112.64 31 March 2011 121.41 30 November 2010 121.67 31 December 2010 135.86 30 April 2011 124.45 31 January 2011 134.21 31 May 2011 126.97 28 February 2011 140.96 30 June 2011 128.88 31 March 2011 146.51 60 30 April 2011 147.76 31 July 2011 131.18 31 May 2011 140.73 31 August 2011 133.64 30 June 2011 134.54 30 September 2011 135.59 31 July 2011 138.57 31 August 2011 138.69 Jan-09 Apr-09 2011 31 October Jul-09 Oct-09 137.54 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 30 September 2011 134.89 1 Mth 4% 3 Mth 3% 12 Mth 18% Following the release of a number of poor economic figures, forecasts and statements, growing concerns around the future of the euro and growth in the Eurozone resulted in the currency weakening substantially versus the US$ in November. As a consequence, the euro price of commodities increased but some of these rises were minimised by lower demand for commodities due to lower growth prospects and milder weather. Tension in the Middle East continue to support oil. Oil Index OIL Month-on-month oil prices were 175 Oil Graph Data 31 January 2009 65.78 relatively unchanged in $ terms but as the € weakened relative to the $, the 28 February 2009 67.03 31 March 2009 68.43 30 April 2009 31 May 2009 30 June 2009 150 70.72 85.34 90.70 € price of a barrel of oil increased by 5%. The price of oil was supported by 31 July 2009 92.57 31 August 2009 89.31 30 September 2009 86.74 31 October 2009 125 93.84 concerns over possible future supply Points 30 November 2009 96.36 31 December 2009 100.00 31 January 2010 28 February 2010 94.62 104.90 disruption as a number of events occurred in oil producing regions. 31 March 2010 112.38 30 April 2010 31 May 2010 30 June 2010 100 121.16 111.65 112.54 November began with renewed 31 July 2010 110.19 31 August 2010 108.17 v 30 September 2010 111.13 31 October 2010 30 November 2010 31 December 2010 109.88 121.18 130.36 75 tensions over Iran’s nuclear programme, 31 January 2011 28 February 2011 135.62 149.07 then violence erupted again in Egypt and it concluded with an attack on a 31 March 2011 152.09 30 April 2011 31 May 2011 156.15 149.41 50 30 June 2011 31 July 2011 31 August 2011 142.55 149.27 146.57 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 British embassy. 30 September 2011 140.51 *Index adjusted for currency movements. However, despite fears over a possible 31 October 2011 144.47 Data Source: ICE disruption to supply, the prospect of 1 Mth 5% 3 Mth 3% 12 Mth 25% a severe economic downturn due to Europe’s debt crisis held prices down.G29238 BGE Energy Index Nov 2011 JJ.indd 2 02/12/2011 15:02
    • Bord Gáis Energy Index OCTOBER 2011 Natural Gas Index Natural Gas Graph 250 NATURAL GAS Data 31 January 2009 28 February 2009 195.04 156.23 Prices ranged 54 to 60 p/therm in the first half of the month as consumption 31 March 2009 99.24 30 April 2009 92.78 200 31 May 2009 87.00 varied due to changeable weather 30 June 2009 87.56 31 July 2009 76.34 31 August 2009 69.4330 September 2009 31 October 2009 61.72 77.55 and unstable UKCS production was Points30 November 2009 83.2131 December 2009 100.00 replaced by increased flows of gas 150 31 January 2010 125.88 from Norway. 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 31 August 2010 157.48 145.96 Mid month prices spiked over 60 p/30 September 2010 31 October 201030 November 2010 132.67 148.57 167.11 100 therm on the back of a colder weather outlook but slid back to below 58 p/31 December 2010 204.87 31 January 2011 188.31 28 February 2011 179.74 therm in the final week as UKCS 31 March 2011 194.03 30 April 2011 181.39 31 May 2011 30 June 2011 31 July 2011 184.99 183.36 179.36 50 production increased, consumption 31 August 2011 172.82 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-1130 September 2011 31 October 2011 180.07 180.16 *Index adjusted for currency movements. Data Source: Spectron Group remained below seasonal averages and IUK exports dropped. Economic uncertainty also contributed to 1 Mth 6% 3 Mth 11% 12 Mth 15% lower prices. Coal Index 175 COAL Coal Graph Coal prices fell in the month due Data 31 January 2009 102.58 150 to low buying interest globally, 28 February 2009 93.02 31 March 2009 82.80 30 April 2009 78.58 31 May 2009 30 June 2009 76.19 76.68 healthy stockpiles, milder European weather and uncertainty surrounding 31 July 2009 81.48 125 31 August 2009 84.15 30 September 2009 83.00 Points economic growth. 31 October 2009 86.26 30 November 2009 88.54 31 December 2009 100.00 31 January 2010 105.77 100 With Indian ports reportedly 28 February 2010 95.28 31 March 2010 95.51 30 April 2010 108.11 crammed with stocks of coal, Chinese 31 May 2010 125.06 30 June 2010 132.03 31 July 2010 121.85 buyers unable to get credit, and 75 31 August 2010 123.28 30 September 2010 121.29 thus buy more coal, and Europeans 31 October 2010 121.83 30 November 2010 150.34 31 December 2010 159.48 requiring less coal (power generation 31 January 2011 148.31 28 February 2011 149.34 31 March 2011 30 April 2011 31 May 2011 153.91 148.29 145.75 50 is lower due to the economic situation 30 June 2011 144.90 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 31 July 2011 31 August 2011 147.62 149.65 *Index adjusted for currency movements. and milder weather), demand for coal 30 September 2011 156.20 Data Source: ICE 31 October 2011 145.04 was relatively subdued in November. 1 Mth -1% 3 Mth -5% 12 Mth -5% With an overhang in supply, prices weakened. Electricity Index ELECTRICITY Electricity Graph Data 150 31 January 2009 28 February 2009 127.36 117.38 The wholesale price for electricity out 31 March 2009 89.56 turned 3% higher month-on-month. 125 30 April 2009 88.58 As the interconnector between 31 May 2009 82.33 30 June 2009 91.74 31 July 2009 83.00 Ireland and the UK was on outage, it 31 August 2009 89.26 30 September 2009 87.28 31 October 2009 91.82 was unable to import power from the Points 30 November 2009 93.65 100 31 December 2009 100.00 UK to Ireland. 31 January 2010 105.32 28 February 2010 98.50 31 March 2010 90.42 30 April 2010 93.24 As a consequence, Ireland had to rely 31 May 2010 105.19 30 June 2010 104.88 31 July 2010 106.05 31 August 2010 30 September 2010 31 October 2010 105.66 109.05 112.69 75 on its own generation fleet to meet 30 November 2010 31 December 2010 31 January 2011 115.75 136.21 123.78 demand and less efficient generators 28 February 2011 120.12 were called upon. In addition, several 50 31 March 2011 129.24 high wind days forced thermal plants 30 April 2011 127.27 31 May 2011 118.10 30 June 2011 112.46 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 31 July 2011 31 August 2011 30 September 2011 112.53 118.86 117.61 Data Source: SEMO off the system temporarily, but when 31 October 2011 114.14 the winds eased, thermal generators were required to provide electricity 1 Mth 3% 3 Mth 2% 12 Mth 5% and plant start-up costs put upward pressure on prices. G29238 BGE Energy Index Nov 2011 JJ.indd 3 02/12/2011 15:02
    • Bord Gáis Energy Index OCTOBER 2011 FX Rates 31 January 2009 EUR/USD 1.283 EURUSD February 2009 EURGBP 31 January 2009 0.887 EUR/GBP FX RATES 28 February 2009 1.272 28 0.886 1.60 Amid talk about the break-up of 31 March 2009 1.323 31 March 2009 0.925 30 April 2009 1.321 30 April 2009 0.894 31 May 2009 1.412 the euro and a countdown to its 31 May 2009 0.874 30 June 2009 1.405 30 June 2009 0.853 31 July 2009 1.424 31 July 2009 0.853 1.40 31 August 2009 30 September 2009 1.434 1.464 31 August 2009 30 September 2009 0.881 0.914 possible demise, the euro weakened 31 October 2009 30 November 2009 1.474 1.498 31 October 2009 30 November 2009 0.896 0.913 significantly versus the US$ and 31 December 2009 1.20 31 January 2010 1.433 1.389 31 December 2009 31 January 2010 0.888 0.867 less so against Sterling, despite 28 February 2010 31 March 2010 1.360 1.353 28 February 2010 31 March 2010 0.893 0.891 uncertainties surrounding the US 30 April 2010 31 May 2010 1.327 1.230 30 April 2010 0.868 and UK economies. 1.00 31 May 2010 0.846 30 June 2010 1.226 30 June 2010 0.819 A continuing stream of poor economic 31 July 2010 1.305 31 July 2010 0.831 31 August 2010 1.269 31 August 2010 0.827 30 September 2010 1.362 related news from the Eurozone is 30 September 2010 0.866 31 October 2010 1.392 0.80 30 November 2010 1.304 31 October 2010 0.869 increasing uncertainty in the region 30 November 2010 0.837 31 December 2010 1.337 31 December 2010 0.857 31 January 2011 1.370 31 January 2011 0.854 28 February 2011 1.379 28 February 2011 0.849 and in its currency. Specifically, 0.60 31 March 2011 1.419 31 March 2011 0.883 30 April 2011 31 May 2011 1.483 Jan-09 1.437 Apr-09 30 April 2011 Jul-09May 2011 31 Oct-09 Jan-10 0.888 0.874 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 the surprisingly disappointing 30 June 2011 31 July 2011 1.451 1.438 30 June 2011 31 July 2011 0.903 0.875 German Bond auction, a reduced 31 August 2011 30 September 2011 1.441 1.345 31 August 2011 0.885 GDP forecast from the European 1 Mth -4% 3 31 October 2011 -7% 0.860 12 Mth Mth 30 September 2011 3% EURUSD Commission and a 25bps cut in the 31 October 2011 1.395 0.865 1 Mth -1% 3 Mth -3% 12 Mth 2% EURGBP interest rate were some of the events that weakened the currency. MARKET OUTLOOK: Uncertainty around the euro and its value versus other currencies could be the biggest driver of the index in 2012. Markets are indicating lower oil prices into 2012 as fears of a second global recession increase due to the possibility of a break up of the euro and worsening economic data out of the US. Forward gas prices have fallen steadily during November due to relatively mild weather in the winter to date and expectations that it may persist resulting in the lowest prices for Q1 2012 seen since January 2011. 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 Oil 64.93% 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 gas and electricity increased by 0.63% and 0.57% respectively. An 13.52% 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 Electricity Coal data. This has had a minimal effect on the overall shape of the Index, 18.40% 3.16% but may indicate future trends. For more information please contact: Fleishman-Hillard - Aidan McLaughlin - 085 749 0484 Bord Gáis Energy - Christine Heffernan - 087 050 5555 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.G29238 BGE Energy Index Nov 2011 JJ.indd 4 02/12/2011 15:02