All prices unless otherwise stated are for the close of February 28. 2012 baseload German power: €53.22/MWh, up 0.51% 2012 CIF ARA Coal: €121.69/t, up 0.54% Front-month UK natural gas: GBp54.72/therm, down 0.83% EU emission allowances (EUAs) for December 2011 delivery: €15.52/t, up 0.58% Certified Emission Reduction(s) (CERs) for December 2011 delivery: €11.83/t, up 0.77% Brent crude oil futures for front-month 2010 delivery: US$112.59/bbl, up 0.7%, as of 10:30 GMT, March 1 WTI crude oil futures for front-month 2010 delivery: US$97.41/bbl, up 0.5%, as of 10:30 GMT, March 1 Latest buzz Oil has recovered from the lowest price seen in a week this morning as Iranian authorities arrested opposition leaders in an attempt to stave off protests scheduled for later today. The potential upside is expected to be limited, given the news that manufacturing growth in China fell in February to a six-month low and a comment from a Saudi source, claiming that the kingdom has a further 3.5mbpd of spare capacity, even after boosting output to around 9mbpd, to meet the shortfall created by the reduction in Libyan oil output. A tanker carrying 700,000bbl of crude bound for China has departed from the Libyan port city of Tobruk, with a second bound for Italy within the next two days. It is the first oil shipment in over a week from the port, which is firmly in rebel hands. At the same time however, Libya’s largest refinery, the 220,000bpd Ras Lanuf facility has suffered from an interruption in its crude supply and is currently exporting fuel from current stockpiles. According to officials, it has enough crude for a few more days of operation. A preliminary poll from Reuters, suggests that the market is expecting the EIA to report a 1.2mbbl increase in US crude inventories tomorrow. A Bloomberg poll is predicting a similar gain of around 1mbbl. South Korea has increased its oil imports for a tenth month, as its refining industry ramps up to meet increased demand for oil products on the international market and cold weather has boosted domestic heating demand. The situation in the Middle East is weighing heavily on the minds of traders and analysts, particularly the events underway in Bahrain and Oman. A further cause for concern is the attack on Iraq’s Baiji refinery, which took place over the weekend and destroyed two of four production lines, causing the facility to shut down. There are concerns that this could have a long-term impact on business confidence and may also reduce the ability of the Iraqi government to realise its ambitious plans for domestic oil production. ICE Brent crude for April delivery fell US¢34 to settle at US$111.80/bbl on Monday, down from an intraday peak of US$114.50/bbl. The Obama administration has issued the first new deep-water drilling permit for the Gulf of Mexico, since BP’s Deepwater Horizon disaster, boosting confidence in the industry. The Federal Bureau of Ocean Energy Management, Regulation and Enforcement approved a permit for Houston-based Noble Energy to drill a bypass well in 6500ft of water approximately 70 miles southeast of Venice, La. A few weeks ago, US District Judge Marti Feldman ruled in Louisiana that the Interior Department had to resolve drilling applications “within a reasonable time” and that the current delays had become “increasingly inexcusable.” Yesterday saw Michael Bromwich, the director of the Bureau, dismiss claims that the permit was issued in response to political and judicial pressure, instead stating that “This permit was issued for one simple reason: The operator successfully demonstrated that it can drill its deep-water well safely and that it is capable of containing a sub-sea blowout if it were to occur.” The news has been welcomed by both oil executives and politicians, such as Senator Mary Landrieu, many of whom are hoping that the number of permits being issued in the near-term will be sufficient to restore drilling activity in the Gulf to the level seen before the disaster. According to Lee Hunt, president of the International Association of Drilling Contractors, six deepwater permits are currently awaiting federal approval and the industry could bring 33 projects back into operation if the necessary permits could be obtained. Natural gas for April delivery on the NYMEX rose by US¢3.2, or 0.8%, to settle at US$4.037/mBtu yesterday, in response to new forecasts predicting below-average temperatures across much of the country for mid-March. According to the Commodity Weather Group, temperatures could be up to five degrees below normal in the upper Midwest. According to the Group’s meteorologists, a weather pattern north of Alaska “is forecast to send a stronger chunk of polar air southward into much of the US for especially the 11-15 day timeframe. “ Meanwhile, Weather Derivatives has predicted that US heating demand could be 4% above normal over the March 6-10 period. Chevron has been forced to upwardly revise the cost estimate for its Escravos Gas Plant in the Niger Delta by US$2.5bn to US$8.4bn. The company, which has a 75% stake in the gas-to-liquids facility and is working in partnership with the Nigerian National Petroleum Corp, has yet to make a final investment decision regarding the Sonam natural gas field in the nearby area, which could be developed to supply the facility. The GTL plant has a design capacity of 325mft3pd (33,000bpd) and work on the project was 70% complete at the end of 2010, with commissioning scheduled for 2013. Peabody Energy has entered into an agreement with Indonesia’s PT Cahay Energi Mandiri (CEM) to source 2Mt of coal for Asian export, through the COALTRADE international trading hub in Singapore. The contract is the third term agreement Peabody has signed in recent months, which together account for 5.5Mt of Indonesian coal. Peabody has also signed a deal with SSA Marine to export up to 24Mta of coal from the Powder River Basin in the US, to the Asian Pacific market. The coal would be shipped via the proposed Gateway Pacific terminal, to be located near Bellingham, Washington. Peabody has said that the terminal could be up and running within “several years.” Prompt-delivered Europe physical coal prices rose yesterday by around US$2 to US$120.50/t, on the back of higher oil prices, despite a conspicuous lack of buying interest. Yesterday also saw the Dec11 EUA contract rise above €15.50/t for the first time since the middle of October. It hit an intraday high of €15.58/t, before falling back to close at €15.24/t, up 0.58% on the previous close. Longer-dated contracts performed more strongly, with the Dec13 and Dec14 contracts rising by 0.88% and 1.06%, respectively. Much of the positive momentum came from a 0.51% increase in the value of the 2012 German baseload power contract, which in turn was pushed up by a 0.54% increase in coal prices. CERs also performed strongly, with the Dec11 and Dec12 contracts advancing 0.77% and 0.69%, respectively. In contrast, the Mar13 contract gained only 0.4%. The Dec11 and Dec12 CER-EUA spreads finished the day at -€3.69 and -€4.46, relatively unchanged from the previous settlement. CER issuance for the week ended February 25 rose to over 4.2m CERs, which were issued to 15 projects.

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