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Irish energy index holds in February

Monday, March 11 10:18:24

The Bord Gais Energy Index was unchanged in February as hopes for a global economic recovery were impacted by a number of negative economic releases.

Italy's rejection of austerity also reminded the markets that the path to recovery will be difficult and is still not assured. A reduction in geopolitical concerns also helped to ease the risk premium that has been applied to oil prices since Iran threatened to close the Strait of Hormuz 12 months ago.

As a result, the Bord Gais Energy Index now stands at 150, a decrease of 4pc on February 2012.

Commenting on the Bord Gais Energy Index for February, John Heffernan, power trader at Bord Gais Energy, said: "Since November, investor mood has been bullish and equities have rallied to all time highs. As financial investors now exert a considerable influence on oil prices, Brent crude oil has been caught up in the tide of optimism and rose from US$110 in November to US$118 by mid February. Shifting market sentiment was demonstrated by the reaction to contrasting economic news from China. Early in the month, oil prices reached a yearly high as China released trade data, suggesting that oil demand for 2013 would be stronger. However, by the end of the month, concerns about the Chinese economy and China's manufacturing sector revealed that it was operating barely above contraction levels and prices fell.