End of year energy prices dip gently as oil anxieties predicted to ease
The Bord Gáis Energy Index, which tracks wholesale energy prices, fell 2 per cent in December as oil buyers in the euro zone benefited from a weaker US dollar and marginally lower Brent crude oil prices.
Lower wholesale Irish electricity prices in December also contributed to a fall in the index. However, the measure ran 4 per cent higher than a year earlier.
Industry concerns about oil supplies may ease this year, forecast John Heffernan, a power trader at Bord Gáis Energy.
“As we move into 2013, increases in US oil production due to hydraulic fracturing has the potential to ease the oil supply anxieties experienced in 2012,” he said.
“Record oil prices in 2012 were heavily influenced by fears of global supply disruptions and the loss of Iranian oil due to EU and US sanctions. In 2013 we could see the subsiding of these fears, and potentially prices.”
However, until the impasse with Iran and civil war in Syria are resolved, oil prices may continue to carry a “fear premium” of $20 per barrel, he said.