Bord Gáis energy index steady at 150 in February

Monday 11 March 2013 10.10
Coal element of the Energy Index jumps by 9%
Coal element of the Energy Index jumps by 9%

The Bord Gáis Energy index, which tracks energy prices and the factors which influence them, was unchanged in February from the previous month as hopes for a world economic recovery were hit by a number of negative economic releases.

The Bord Gáis energy index stood at 150, down 4% on the same time last year.

Bord Gáis said that in euro terms, the Brent crude price was unchanged in February. But in dollar terms, prices were down nearly 4% as the confidence seen at the start of the year was fleeting and began to wane.

During the month, oil prices (in dollar terms) fell due to expanding supplies, easing geopolitical pressures and the doubts over the world's appetite for oil this year.

The natural gas element of the index rose 3% as the cold weather heavily depleted storage levels at the UK's main gas store in Rough. Bord Gáis said there is now growing concerns about the loss of LNG gas supplies to the UK over the last year.

February saw the coal element of the index rising by 9% with European prices affected by the loss of Colombian coal imports. Workers at Colombia's largest coal producer went on strike for the first time since 1990 and talks to resolve the wage dispute broke down.

The electricity element of the index fell 1% despite rising wholesale gas and coal prices. Over 65% of the electricity generated in Ireland came from burning gas and coal, but despite the rising prices, more efficient gas plants saw wholesale electricity prices drop.

Bord Gáis power trader John Heffernan noted that a key factor that could impact oil prices in the months ahead is the growing shale oil ''revolution'' in the US. He said that domestic oil output is now 22% higher than a year ago.

''With the US relying less on imports, particularly from Nigeria, prices are easing in the global oil market. Coupled with rising supplies, demand by the world's number one consumer of oil hit the lowest level in 2012 since 1996,'' he stated.