The Bord Gáis Energy Index remains relatively unchanged over the last 12 months but fell 7% in June. The major factor influencing the decline in the Index is the fall in the price of Brent crude oil which continues to recede from the record highs seen in March, although the price of oil has rebounded somewhat in the last week.

1. Bord Gáis Energy Index
JUNE 2012

2. Bord Gáis Energy Index
june 2012
INDEX FALLS 1% ON A YEAR ON YEAR BASIS WITH ONGOING
OIL PRICE VOLATILITY
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 88.29
31 January 2010
28 February 2010
88.92
90.20
OVERALL SUMMARY:
31 March 2010 92.51
30 April 2010 95.31 The Bord Gáis Energy Index remains relatively
unchanged over the last 12 months but fell
31 May 2010 97.49
30 June 2010 99.22
140 31 July 2010
31 August 2010
101.09
102.82
7% in June. The major factor influencing
the decline in the Index is the fall in the
Points
30 September 2010 104.97
price of Brent crude oil which continues to
31 October 2010 106.66
30 November 2010 108.89
31 December 2010 111.88
recede from the record highs seen in March,
100
31 January 2011 114.76
28 February 2011 117.91 although the price of oil has rebounded
31 March 2011
30 April 2011
121.41
124.45
somewhat in the last week.
31 May 2011 126.97
30 June 2011 128.88
31 July 2011 131.18
60 31 August 2011
30 September 2011
133.64
135.59
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 -13% 12 Mth -1%
Because of the ongoing European sovereign debt crisis over the last 12 months, the euro has fallen 13% versus the US Dollar
and 11% versus the British Pound. So despite falls in oil, coal and Day-ahead UK gas prices over a 12 month period in US Dollar
and British Pound terms, commodity price falls in euro terms have not fully materialised for euro zone buyers.
Volatility in the price of oil continued in June and it became evident again that oil’s ability to trade on its own fundamentals
has been overshadowed by the ongoing European financial crisis. However, given the possibility that Europe can now move
to find a solution to the crisis by ‘Europeanising’ national debt, oil market fundamentals such as the sanctions on Iran and
the potential loss of 1 million barrels of oil, and a myriad of other uncertainties, may once again take centre stage in the
months to come.
Oil Index OIL
The price of a barrel of oil fell 6% in euro
180 terms in June and recorded its third month
of consecutive decline as the Brent crude
oil price continues to recede from its high of
$128 in March. Back in March, geo-political
tensions dominated the markets and oil
140 prices escalated. From April onward, a series
Points
of negotiations between the West and Iran
over its disputed nuclear programme helped
to appease the markets.
100
The potential negative economic fallout
from the ongoing European sovereign debt
issue created a bout of risk aversion which
60 rattled the oil markets in June and drove
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
prices to an 18 month low at one point. Given
*Index adjusted for currency movements. that China has a greater impact on global oil
Data Source: ICE
demand growth than a slowdown in Europe,
the slowing Chinese economy, as evidenced
in its declining industrial production,
1 Mth -6% 3 Mth -16% 12 Mth 0%
retail sales and manufacturing numbers,
continued to weigh on prices in June.
Despite recent price falls due to a bout
of market risk aversion, the average price
of a barrel of Brent crude oil in 2012 is
currently over $113, $2 higher than the
record set in 2011, and prices remain “very
high in historical terms” according to the
International Energy Agency.

3. Bord Gáis Energy Index
june 2012
Natural Gas Index NATURAL GAS
Natural
Over the course of the month, the UK Day-ahead
gas price was relatively stable and traded in a very
Gas Graph
Data
250 tight range between 54 - 57p per therm. In euro
31 January 2009 195.04
28 February 2009 156.23
terms, the average monthly Day-ahead UK gas
31 March 2009 99.24
30 April 2009 92.78
31 May 2009 87.00
30 June 2009
31 July 2009
87.56
76.34
price in June was 5% lower than its May equivalent.
31 August 2009 69.43
200 A fall in the monthly average Day-ahead price was
30 September 2009 61.72
31 October 2009 77.55
30 November 2009 83.21
31 December 2009
31 January 2010
100.00
125.88
recorded despite a number of unplanned outages
28 February 2010
31 March 2010
114.44
101.67 and a strike by 700 platform workers in the North
Points
106.04
Sea over pension contributions. According to
30 April 2010
150
31 May 2010 130.73
30 June 2010 145.29
31 July 2010
31 August 2010
157.48
145.96 Platts, the strike action reduced Norway’s oil
production by 15% and its gas output by 7%
30 September 2010 132.67
31 October 2010 148.57
30 November 2010 167.11
31 December 2010 204.87
following the closure of 6 fields. Norway is the
100
31 January 2011 188.31
world’s eighth largest oil exporter, and Norwegian
28 February 2011 179.74
31 March 2011 194.03
30 April 2011 181.39
31 May 2011
30 June 2011
184.99
183.36
gas exports cover close to 20% of European gas
consumption with most exports going to Germany,
31 July 2011 179.36
31 August 2011 172.82
30 September 2011 180.07
31 October 2011
31 November 2011
31 December 2011
180.16
191.53
189.94
50 the UK, Belgium and France. However, because of
reduced gas demand during the summer season,
31 January 2012 184.35 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11currency movements.
*Index adjusted for Jan-12 Apr-12
markets failed to react in June.
31 February 2012 221.68
Data Source: Spectron Group
Over the month, in euro terms, the forward winter
1 Mth -5% 3 Mth -2% 12 Mth 6% and summer gas contracts were little changed,
despite falling oil prices. In euro terms, these
forward seasonal contracts closed the month
higher than where they were at the start of the year.
Coal Index Coal
European coal prices continued to decline in June,
having now fallen nearly 20% in euro terms over
260 the last 12 months.
Following the explosion of shale drilling in the
US, US utilities are now burning more gas and are
relying less on coal to produce electricity. This
205 decline is pushing US producers to increasingly
look to Europe as an export market. This surplus
continues to push European coal prices lower, and
Points
150 as a consequence, Europe is now burning relatively
cheap coal to produce electricity at the fastest
pace since 2006.
Global coal prices remain depressed as Chinese
95 demand for coal, the fuel for three-quarters of the
nation’s power plants, has faltered as the economic
slowdown slows electricity demand. Healthy
40 *Index adjusted for currency movements. hydro generation also weighed on prices. As a
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 Source: ICE
Data Apr-12
consequence, China’s coal stockpiles have risen
to the highest level since the global financial crisis
of 2008. A weakening oil price is also weighing on
European coal prices.
1 Mth -4% 3 Mth -8% 12 Mth -19%
Electricity Index ELECTRICITY
Irish wholesale electricity prices were 8% lower in
June compared to May. As the majority of power
180 produced on the island of Ireland is generated
by burning gas, a 5% fall in the average monthly
wholesale Day-ahead UK gas price in euro terms
put downward pressure on the cost to produce
electricity in June.
140 Furthermore, a carbon revenue levy (imposed
Points
on generators by the Commission for Energy
Regulation and disbursed in line with Government
policy) that was included in the price of wholesale
100 electricity, and was estimated to have increased
the price by between 3% and 6%, has now been
removed by the Government.
Furthermore, a gradual erosion in power demand
60 with greater daylight and a reduced need for
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 home heating meant that the electricity system
Data Source: SEMO
needed fewer generators to produce electricity
and this added further pressure on Irish wholesale
electricity prices.
1 Mth -8% 3 Mth -9% 12 Mth -3%

4. Bord Gáis Energy Index
june 2012
FX Rates FX RATES
Having weakened over the last 3 months,
EUR/USD EUR/GBP
31 January 2009 1.283 31 January 2009 0.887
28 February 2009 1.272
28 February 2009 0.886
the euro recorded a 2% gain versus the US
1.60
31 March 2009 0.925
31 March 2009 1.323
30 April 2009 1.321
30 April 2009
31 May 2009
0.894
0.874
Dollar in June. The euro stabilised versus the
31 May 2009 1.412
30 June 2009 1.405
30 June 2009
31 July 2009
0.853
0.853
British Pound in June but has lost 11% in value
1.40 over a 12 month period due to the European
31 July 2009 1.424 31 August 2009 0.881
31 August 2009 1.434 30 September 2009 0.914
30 September 2009
31 October 2009
1.464
1.474
31 October 2009
30 November 2009
0.896
0.913
sovereign debt crisis.
30 November 2009 1.498 31 December 2009 0.888
The euro’s strength in the month can be
1.20
31 December 2009 1.433 31 January 2010 0.867
28 February 2010 0.893
attributed to euro zone leaders agreeing to
31 January 2010 1.389
31 March 2010 0.891
28 February 2010 1.360
30 April 2010 0.868
31 March 2010 1.353
31 May 2010 0.846 instruct the euro zone finance ministers to
1.00
30 April 2010 1.327
0.819
implement a new plan that would involve
30 June 2010
31 May 2010 1.230
31 July 2010 0.831
30 June 2010 1.226
the possibility of ‘Europeanising’ national
31 August 2010 0.827
31 July 2010 1.305
30 September 2010 0.866
31 August 2010 1.269
debt for the first time. The market responded
31 October 2010 0.869
0.80
30 September 2010 1.362 30 November 2010 0.837
positively to this new departure which aims
31 October 2010 1.392 31 December 2010 0.857
30 November 2010 1.304 31 January 2011 0.854
31 December 2010
31 January 2011
1.337
1.370
28 February 2011
31 March 2011
0.849
0.883 to ‘break the vicious circle between banks
0.60
28 February 2011
31 March 2011
1.379
1.419
30 April 2011
31 May 2011
0.888
0.874
and sovereigns’ which has plagued European
30 April 2011 Jan-09 Apr-09 Jul-09 Oct-09 0.903
1.483
30 June 2011Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
31 July 2011 0.875
growth and fuelled economic uncertainty.
1.437
The growing prospect that the ECB would
31 May 2011
31 August 2011 0.885
30 June 2011 1.451
30 September 2011 0.860
31 July 2011
31 August 2011
1.438
1.441
31 October 2011
31 November 2011
0.8615
0.8562
cut its benchmark interest rate in July to an
1 Mth
30 September 2011
31 October 2011
1.345
2%
1.395 3 Mth -5%
31 December 2011
31 January 2012
0.8334
0.8302 12 Mth -13% EURUSD all time low also supported sentiment toward
31 November 2011 1.3446 31 February 2012 0.8372
the region and its currency in June.
31 December 2011 1.2961
1 Mth
31 January 2012
31 January 2012
0%
1.3084
1.3325
3 Mth -3% 12 Mth -11% EURGBP The US Dollar’s weakness can be attributed
to growing concern about the $650billion
fiscal tightening expected in the US in 2013
and the growing likelihood of a third round of
quantitative easing by the Federal Reserve
Bank.
Market Outlook:
According to the International Energy Agency, when it comes to oil prices “there is no room for complacency...because you never
know what prices are going to do”. This view is supported by the dramatic and sudden oil price rise to $128 in March and recent
falls. Looking forward, prices have the potential to fall once again to the lows seen in June given the healthy oil supply picture and
slower global growth, particularly in China.
However, the outlook is far from certain given that the Chinese authorities have the means and motivation to stimulate economic
growth, Iran’s reaction to the EU’s sanctions after 1st July is unknown and renewed geopolitical tensions once again puts the spotlight
on the vulnerable Strait of Hormuz. Spare production capacity remains low by historic standards and any growth in demand in the
second half of 2012 could put upward pressure on prices. Traders will also assess OPEC’s collective tolerance of prices below $100.
Seasonal gas prices will continue to be influenced by future movements in oil and potential developments in Japan as it plans
to restart nuclear power stations for the first time since last year’s Fukushima disaster. According to Bloomberg there is now
“speculation that prices for liquefied natural gas have peaked after reaching a three year high” as Japanese demand could be
eroded over time. However, in the short term, the strike by 700 platform workers in the North Sea has the potential to drive prices
if the dispute escalates.
re-weighting of bord gáis energy index: Oil 64.93%
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 Gas
and electricity increased by 0.63% and 0.57% respectively. An increase in the use 13.52%
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 Electricity Coal
the Index, but may indicate future trends. 18.40% 3.16%
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
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