The Bord Gáis Energy Index fell 16 per cent in November as oil, gas and coal prices all declined. The index, which monitors wholesale energy prices, remains 7 per cent higher than this time last year.
A 22 per cent drop in oil prices was the primary contributor to the index’s fall, with Brent crude settling at $58.71 (€51.93) a barrel. Prices were driven lower in recent months by increased production by countries that are not part of the Organisation of Petroleum Exporting Countries (Opec) cartel of oil producing nations, including the US where strong production of shale oil continued.
David Grainger, energy trader with Bord Gáis Energy said: “Key drivers of the drop in the oil price were reduced supply concerns, after watered down Iranian sanctions, and an increase in non-OPEC production while a continuing benign weather picture weighed on UK gas demand, as warmer temperatures kept gas demand in check.”
Global growth
Any future slowdown in global growth will negatively impact demand for oil, causing downward pressure on prices, Bord Gáis said in a statement.
Gas prices fell 4 per cent in November as benign weather conditions weighed on demand. Despite the decline, gas prices remain more than 22 per cent higher than a year ago.
Wholesale electricity costs, which generally track the price of gas, fell 8 per cent. Bord Gáis said that an average of 42 per cent of the country’s electricity supply for the month was wind-generated.
Mild weather
Forecasts of mild weather also contributed to a 9 per cent fall in the price of coal. High levels of stock and the lower gas price contributed to the drop. Globally, Chinese import quotas and controls coupled with low seasonal demand in India negatively affected sentiment.
Falling prices were marginally offset by gains by the euro against sterling and the dollar. The euro posted a 0.08 per cent rise against both currencies in November.
