GROWING SHALE OIL REVOLUTION IN THE US COULD RESULT IN LOWER OIL PRICES - Oil prices could drop in future if the US becomes energy independent or even becomes a net exporter of oil and gas, says John Heffernan, a power trader with Bord Gáis Energy. Commenting on the Bord Gáis Energy index, which tracks energy prices and the factors which influence them, Mr Heffernan says the index showed no movement in February from the previous month. A reduction in geopolitical concerns helped to ease prices over the past month but there were a number of other factors at play.
John Heffernan says there was a drop in oil price in dollar terms because the euro weakened against the US currency in the month. "Oil is the dominant part of the energy index. If it doesn't change, we don't really see any change in the overall index," he says. The coal index was up 9% arising from issues in Colombia in the month of February. "There's a strike with the major producer. The second producer can't export due to environmental concerns. The market got a bit tense and we saw a 9% increase in the price," John Heffernan points out, adding that the coal price is expected to ease off in the coming month.
A key factor that could impact on oil prices in the months ahead is the growing shale oil revolution in the US. "The amount of oil coming out of the US is showing a massive increase. February production hit a 20 year high and imports dropped to a 20 year low. Production was up 22%. Shale oil is the reason and it's being described as a game-changer. They are getting access to unconventional oil and huge quantities of it." John Heffernan points to predictions that the US could become energy independent and become the biggest oil and gas producer by 2020 in the world. That could mean less concerns about what happens in the Middle East. As a result there would be more spare capacity and Brent crude prices should start easing slightly, he predicts.
MORNING BRIEFS - The Swiss based baked goods group Aryzta has results out for the six months ended January 31. Group revenue was up 8% to just over €2 billion, while net profit was 5.5% higher at €129.4m. Earnings per share were up 0.5% to 146.4 cent and the company said it expects share earnings to return to double digit growth for the full year.
*** The Ulster Bank Construction Purchasing Managers Index - which looks at activity in the construction sector - showed a slight drop in activity in February. However, new orders and employment fell at slower rates than in previous months.
*** Jobs and Enterprise Minister Richard Bruton is in Washington today for talks with senior figures in the Obama administration on a new EU-US Free Trade agreement. In his state of the union speech this year, President Barack Obama said negotiations would begin on a free trade agreement between the US and Europe. The proposed partnership would remove tariffs, open markets and potentially boost economic activity.
*** Australia's central bank has been hit by a cyber attack, but it says no data was lost or systems compromised. A report in today's Australian Financial Review newspaper claims the bank has been repeatedly and successfully hacked and information stolen. The bank responded with a statement saying it had been the target of cyber attacks but said it was confident that viruses had been isolated and had not spread across the banking systems or network.
*** Irish based online betting site and prediction market - Intrade - is to shut down, the company says on its website. Customer accounts have been frozen pending an investigation. It is unclear if the company is going to reopen. The site was sued late last year by the US regulator and was blocked to all US users as question marks apparently arose over whether the "prediction markets" it specialised in actually had predictive ability. The site was particularly popular during election season in the US.