The Bord Gáis Energy Index increased by 14% in June with all components of the Index growing as Covid-19 restrictions start to lift and the world slowly adapts to the new normal.
It was another month of recovery for the oil market, with Brent gaining 15% as lockdown restrictions eased and supply constraints helped tighten the market. This recovery theme was replicated throughout the Index, with easing lockdowns and reductions in LNG flows into Europe lifting gas prices 9%. Electricity prices gained 10% on recovering demand and increasing gas prices, while coal gained an impressive 28%. The Index has now gained for the second month in a row but is still 40% lower on a year to date basis.
In June, the Bord Gáis Energy Index closed at 57.
David Grainger, Energy Trader with Bord Gáis Energy, said, “We have seen a sharp rise in the Bord Gáis Energy Index in June 2020, with a 14% increase, building on the strong gains made in May. The increases in June were broader based as we saw each of the Index components rise, in contrast to May where oil was the only component to gain.
Oil was a key driver again in June as lockdown restrictions eased and lower supply from OPEC and the US helped to tighten the market. Oil gained 15% in the month. There were also signs of recovery in the other Index components as gas gained 9%, electricity gained 10% and coal was resurgent gaining 28%. While the Index has made double digit gains for two months in a row, it remains 40% lower on a year to date basis highlighting the impact that oversupply and demand destruction is having on energy prices.”