Bord Gáis Energy Index Gains 13% In November

The Bord Gáis Energy Index rose 13% in November as colder weather supported gas and electricity prices. Natural gas gained 47% as gas prices recovered from very low levels in October as temperatures dropped. The increase in gas drove electricity prices higher, with a 26% gain in day-ahead power prices last month. Oil prices gained 5% in November, which also contributed to the strong recovery in the index for the month.

In November, the Bord Gáis Energy Index closed at 98.

David Grainger, Energy Trader with Bord Gáis Energy, said, “The Bord Gáis Energy Index for November shows that wholesale energy prices gained 13% over the month. Gas has seen the greatest increase, gaining 47% due to increased demand with the colder weather. Other components of the index have seen gains too, with electricity up 26%, oil up 5% and coal up 1.2% in November.”

 

Gas prices gain 47%…

The day-ahead contract, the price of gas for next day delivery, ended November 11.6p higher at 37.5p/th, an increase of over 47% in euro terms, with cooler temperatures seeing demand averaging 10% above the same period last year.

Healthy storage levels and robust LNG flows meant the system was able to balance comfortably despite this uptick in demand.  However, the European gas market may be impacted by the failure of Russia and the Ukraine to agree on a gas transit arrangement for 2020, which could result in gas interruptions in January if not resolved.

 

Electricity increases 26% in November…

The average day-ahead price for electricity increased 26% to €51.99/MWh in November as reduced wind, increased demand and higher gas prices combined to push prices higher. The average hourly demand increased by 8.25% in line with shortening days and seasonal weather.

The average hourly wind output was down 7% to 1419MW (versus 1522MW in October) resulting in a decrease in the portion of demand met by wind to 31% from 36% the previous month.

 

Oil up 5% in November…

Oil prices ended the month 5% higher on reports of an impending breakthrough in trade discussions between China and the US. The ongoing trade uncertainty between the world’s two largest economies has weighed on global economic growth and consequently on global oil demand. OPEC has also suggested that it is prepared to deliver further production cuts to support prices, with Saudi Arabia keen to support oil prices ahead of the long-awaited Saudi Aramco Initial Public Offering.

The Brent crude benchmark contract settled at $62.4 a barrel, an increase of almost 5% in euro terms.

 

Coal settles 1.2% higher and the euro falls against the pound and the dollar…

Coal prices settled 1.2% higher in euro terms at $56.4 a tonne for November. The coal price itself was little changed over the month but a weakening euro pushed coal prices higher for European buyers. The euro fell against the pound and the dollar in November settling 1.1% lower at £0.852 versus the pound and 1.2% lower at $1.10 against the dollar.

 

For more information, see the full Energy Index at bordgaisenergy.ie/energyindex/

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