Bord Gáis Energy index rose 8% in July

THE MONTHLY Bord Gáis Energy index rose 8 per cent last month as wholesale oil prices rose on the back of supply concerns.

The index now stands at 144, an increase of 4 per cent on July last year.

John Heffernan, power trader at Bord Gáis Energy, said: “Despite the global economic backdrop, wholesale energy prices increased in July, with gains recorded in the wholesale price of oil, gas, coal and electricity.

“In July we saw the vulnerability of fuel commodity prices to threats in global supplies or supply failures.

“A combination of industrial action in Norway and Colombia, together with escalating tensions in the Middle East, pushed prices higher. The euro performed poorly against its rivals during the month and lost more ground to the US dollar and British pound, which impacted negatively on euro zone commodity buyers.

“As an importer of fuels, Ireland remains very exposed to market shocks and price movements.

“We did see a fall in natural gas spot prices in Asia over the last month which could mark the end of the very aggressive Japanese buying following the Fukushima disaster and perhaps the start of higher LNG gas supplies to Europe which have been declining.

“However, Japanese LNG imports are expected to remain high as its nuclear reactors are only expected to return gradually during 2012 and beyond, so the competition for limited LNG deliveries will remain intense.

“Forward gas prices had been supported in the recent past by the uncertainty of vital LNG supplies to the UK this coming winter. With the ongoing weakness of the euro, any potential future oil or gas price falls may not be fully realised by euro zone countries and any rises could be amplified.”