Mild winter and weaker dollar cut energy prices
Published 07/01/2013 | 05:00
ENERGY prices fell in December thanks to mild winter weather and a weaker dollar, according to the latest Bord Gais Energy survey.
The Bord Gais Energy Index fell 2pc in December, and is now 4pc above the level in December 2011.
The price of oil and wholesale electricity both dropped in December, according to the Index. Natural gas and coal prices rose marginally.
It meant an overall decline in energy prices for business customers.
The drop was driven by a combination of a weaker US dollar, which cuts the real cost of oil in particular because it is priced in the US currency.
Oil was also down thanks to lower Brent crude prices.
"Record oil prices in 2012 were heavily influenced by fears of global supply disruptions and the loss of Iranian oil due to EU and US sanctions.
''In 2013 we could see the subsiding of these fears, and potentially prices, if US oil production results in the expansion of OPEC's spare capacity," said John Heffernan a power trader at Bord Gais Energy.
He warned, however, that strife between Israel and Iran and civil war in Syria could still mean oil trades with a "fear" premium in the year ahead.
Wholesale electricity prices were down despite a rise in demand on the back of lower input costs, he said.