A new energy index, specific to Ireland and designed to track movement in the wholesale energy market, was launched today by Bord Gáis Energy.
The Bord Gáis Energy Index, the first of its kind in the Irish market, is made up of four key energy commodities: oil, gas, coal and electricity. It tracks the monthly global price movements of these commodities, factoring in any currency shifts.
The Bord Gáis Energy Index will be issued on the second Monday of every month.
According to the first results of the index, the price of oil fell by 8% in euro terms in May due to continued unease over the sovereign credit problems in Europe and uncertainty surrounding changes to financial regulations in the US.
This significant reduction in oil prices more than offset by rising prices in gas, coal and electricity which were compounded by the weakening of the euro.
The overall Bord Gáis Energy Index fell slightly during May despite the individual components being volatile. The Bord Gáis Energy Index fell to 109.8 in May, from 111.4 in the previous month.
This is the first noteworthy drop in the Energy Index since September 2009.
The Bord Gáis Energy Index has set December 31, 2009 as the baseline date for the index, setting prices at the close of trading that day at 100 points.
The index looks back two years, exposing a peak in June 2008 of 180 points, when oil prices were at record highs, and a low of 80 points in March 2009 as the impact of the global recession hit.
Energy is a significant element of the Irish economy and it is estimated that Irish businesses spend close to €2bn on energy every year. By regularly tracking and publicising the movements and trends in energy prices, businesses and the public can plan and understand better the impact this sector has on economic activity, Bord Gáis said.
These prices are an important barometer of how the global economy is performing and that has a particular relevance to a small open economy like Ireland, according to Bord Gáis.
