Continuing steep rises in wholesale oil prices have offset declines in wholesale natural gas prices this month leaving the Bord Gáis Irish Energy Index unchanged month-on-month in June. Brent crude oil hit a yearly high in teh month as events in Iraq alarmed the market and raised concerns about the ability of global oil supplies to meet rising demand. The rising oil prices were however offset by a 12% drop in Day-ahead average UK natural gas price for June.
The recent tension and military activity in Iraq has increased the threat to the global supplies of oil which resulted in a 2% increase in the front month Brent Crude Oil price. The drop in natural gas prices also had an effect on Irish wholesale electricity prices which fell 4% in June, as gas is the primary fuel used to generate electricity in Ireland.
The current decline in the price of wholesale natural gas is attributed to the mild UK winter which reduced the need to withdraw gas from storage facilities over the winter period. This has left storage levels quite high at 83% full compared to just 53% at the same time last year. The UK is also continuing to benefit from bumper gas supplies and this is adding further pressure on prices.
In June 2014 the Index stood at 133.