Bord Gáis Energy index slips 7% as oil and gas and prices fall
Market reaction to the Opec deal extension have seen oil prices take another hit
Falling prices for oil, gas and electricity saw the Bord Gáis Energy index fell by 7 per cent in June.
Oil dropped 6 per cent as disappointment at the level of Opec production cuts continued to weigh on prices while gas prices were down by 12 per cent due to the unavailability of a key infrastructure pipeline.
The average wholesale price of electricity was also lower by 7 per cent with prices typically tracking the cost of imported gas as it is the most significant cost in the production of electricity.
Coal was the exception with prices tracking 2 per cent higher.
The report highlights US president Donald Trump’s decision to withdraw from the Paris climate agreement and revive the US coal industry.
“This rhetoric is misguided however. The decline of coal is caused by falling natural gas prices as a result of the fracking revolution, stagnant power demand and decreasing renewable costs, rather than any emission reducing measures imposed on the industry,” it said.
Commenting on the latest index, Darragh Crowley, energy trader with Bord Gáis Energy, said: “The Bord Gáis Energy index continued to fall during June, and is lower year-on-year for the first time in 2017.”
“Market reaction to the Opec deal extension, coupled with expected production increases by the US and Canada, have seen oil prices take another hit,” he said.
“There may well still be a recovery for oil, and indeed across the board, towards the end of 2017, but this is heavily dependent on North American and Opec activity,” he said.