Energy price increase of 4% due to Middle East worries
Concerns about oil supply push Brent crude prices to six-month high
Bord Gáis trader John Heffernan said the oil price spike has coincided with significant supply shortfalls in Libya and Iraq and the potential threat to supplies through Egypt. Photograph: Cyril Byrne
Irish energy prices rose 4 per cent last month, as oil supply concerns pushed up Brent crude prices to a six-month high. These concerns arose as a result of falling oil production in Libya and Iraq but were heightened by events in Syria and the potential of a military intervention.
Although Syria is not an oil supplier, traders anticipated that the civil war could escalate into a disruptive regional conflict.
Natural gas prices for the month increased by 2 per cent. Depreciation of the euro versus sterling contributed to a rise for euro zone buyers of UK gas.
Overall, the Bord Gáis Energy Index, which measures wholesale energy prices, rose to 147, a 7 per cent increase compared to May of this year.
Bord Gáis trader John Heffernan said the oil price spike has coincided with significant supply shortfalls in Libya and Iraq and the potential threat to supplies through Egypt. “Although Saudi Arabia has increased production, this has come at the expense of the world’s spare capacity,” he said.
In euro terms, coal was unchanged while there was modest upward pressure on the wholesale electricity price in August, due partly to the impact of the rise in wholesale UK gas prices.