Tensions lead to energy price rise
Ongoing unrest in the Middle East and north Africa contributed to an increase in wholesale energy prices last month, according to a survey published today.
Oil prices increased in November amid concerns that tension in the region would disrupt global supply, pushing the Bord Gáis Energy Index, which measures prices in the wholesale energy market, up by 2 per cent.
The index now stands 5 per cent higher than the same time last year.
Oil prices also received a boost from developments in Europe. News that agreement had been reached on Greece’s debt sent a signal to the markets that every attempt would be made to keep Greece in the euro zone.
Meanwhile, the injection of €37 billion by the European Commission into four Spanish banks also helped bolster sentiment.
The unrest experienced in the Middle East and North African region during November, and the possibility that tensions could escalate in 2013, drove prices higher, according to John Heffernan, a power trader at Bord Gáis Energy.
“An average of 1.7 million barrels of oil production a day is being lost from the region and the price of oil in 2012 has reached an annual record high,” he added.
UK gas prices rose last month as cold weather led to strong rises in residential demand. Constraints in Britain affect natural gas prices in Ireland, as it is a key supplier to the Republic.