The Bord Gáis Energy Index was lower in October, falling 4% over the month, and is now 31% below the comparable period last year. Oil, the largest component of the index, fell 3% as the outlook for oil demand continued to deteriorate in the face of a weakening global economy. Among the other components of the index, gas prices gained 6% supported by a strong recovery in sterling, while electricity was 7% lower due to increased wind generation, and coal prices fell 9% on weak demand.
In October, the Bord Gáis Energy Index closed at 87.
David Grainger, Energy Trader with Bord Gáis Energy, said, “The Bord Gáis Energy Index for October shows that wholesale energy prices fell 4% over the month. Oil prices, which make up the largest component of the index, fell 3% in October following modest gains in September. Across the other components of the index, gas prices gained 6% over the month, with electricity prices falling 7% and coal falling 9%.”
Oil drops 3% in October…
Oil prices ended the month 3% down in October, as the demand outlook continued to soften. Just six weeks after an attack on Saudi Arabia’s oil infrastructure pushed oil prices over $70 a barrel, prices are struggling to hold onto $60 a barrel. It would have been reasonable to expect that such an attack would drive prices higher, but a deteriorating economic outlook, exacerbated by a trade war between the world’s two largest economies, has seen oil demand forecasts revised lower.
The Brent Crude benchmark contract settled at $60.2 a barrel, a decrease of almost 3% in euro terms.
Gas prices gain 6%…
The day-ahead contract, the price of gas for next day delivery, ended the month 0.6p higher at 26.6p/th, an increase of over 6% in euro terms given the sharp increase in sterling as the risk of a no-deal Brexit receded.
Despite the increase this month, prompt gas prices remain low as market fundamentals point to a well-supplied system. As we move toward the colder winter months, gas prices across the globe remain under significant pressure with weak Asian demand and increasing LNG capacity weighing on market sentiment.
Electricity falls 7% in October…
The average day-ahead price was down 7% from €44.10/MWh in September to €41.17/MWh in October. Average hourly demand increased by 7% with the arrival of the colder months, but increased wind resulted in lower day-ahead electricity prices.
The average hourly wind output was up 20% to 1522MW (versus 1273MW in September) resulting in an increase in the portion of demand met by wind to 36% from 32% in September.
Coal settles at $56.4 a tonne and a mixed month for the euro…
Coal prices settled a dollar lower at $56.4 a tonne in October, a decrease of 9.4% in euro terms compared to the previous month. The euro had a mixed month, settling 2.2% higher versus the dollar at $1.115, while it fell 3% against sterling to close at £0.862.
For more information, see the full Energy Index at bordgaisenergy.ie/energyindex/