ENERGY INDEX DOWN 12% IN APRIL - Energy prices fell by 12% last month after hitting a peak in March, according to the latest Bord Gáís Energy Index. UK wholesale gas prices dropped from the record highs recorded in March. Lower Brent crude oil prices during the month were also a factor, but it should be noted that wholesale energy prices are still 33% higher than they were this time two years ago.
Bord Gáis energy trader John Heffernan says the overall trend is downward pressure. Oil is off $10 in April due to increased production in the North Sea and decreasing European demand. Shale production in the US is also increasing supplies while weak economic growth in the likes of China is impacting prices.
Mr Heffernan says that US stock levels are at 82 year highs. Light sweet crude oil is no longer being imported into the US, which means there is more OPEC oil for the rest of the world. He says the US is becoming oil independent with about 80% of its needs now provided for domestically. But the power trader says that the geo-political situation is always lurking in the background, pushing prices higher as the risk premium remains priced in.
MORNING BRIEFS - AIB has said it is on track of reaching its target of returning to pre-provision operating profit in 2013. In an interim management statement, the bank said that actions taken last year have resulted in an improvement in its overall operating performance in the first quarter of 2013. It said its loan portfolios are performing in line with expectations and bad debt provisions for 2013 are expected to be ''significantly lower'' than 2012 levels, based on current expected economic performance.
*** Aer Lingus' passenger figures in April were down 2.5% overall compared to the same month last year. The discrepancy is explained in part, says the airline, by the vagaries of when Easter Sunday falls. It was in April last year which boosted the 2012 passenger numbers, but was in March this year so Aer Lingus got the benefit of the tourism boost in that month rather than in April.
*** IBEC's latest economic outlook forecasts a pick-up in consumer spending. That explains some of the context behind that story in the Irish Times this morning on the back of the employer's group's call for the Government to abandon the €500m hikes on the menu for budget 2014. IBEC predicts this year will see consumer spending remain pretty much flat with 2012 levels but that we will see growth in the volume of goods and services being bought here next year for the first time since the 2008 financial crisis. For the year ahead IBEC pencilling in growth of 1.8% in GDP or annual economic output - one of the more optimistic predictions we have seen of late. It is also ahead of what the Department of Finance had factored into the budget arithmetic last October when it forecast 1.5% growth.
*** Cairn Energy, one of the larger independent European oil exploration firms, has agreed a deal with Chrysaor take on the bulk of the cost of two wells off the west coast of Ireland. That is the result of a farm-out deal, where a small exploration company which has identified a decent prospect of finding oil and gas, brings in a larger partner to help with the heavy drilling.
*** Facebook is to begin incorporating video advertising into its news feed from July. The news feed is the most popular part of the Facebook site and the first page users see when they log in to get updates from their friends. From July those updates will be accompanied by the occasional video ad which will start playing automatically albeit without sound for a maximum of 15 seconds.