Cold spell sees rise in fuel demands

THERE was a major increase in the global demand for oil, coal and natural gas last month as a result of extreme weather and a global economic recovery.

Fears have also been expressed that another cold snap could lead to a further reduction of coal stocks in Europe which have already fallen steadily over the past few months.

The Bord Gáis Energy Index (BGEI), an Irish-specific index designed to measure the prices in the wholesale energy market, increased by 12% in December, to 137.

The index tracks the monthly price movements of oil, gas, coal and electricity factoring in any currency shifts, and producing an overview and insight into the energy sector.

Oil prices settled at $94.75, $8.83 higher for the month of December. This was the largest monthly increase in crude oil prices since May 2009.

Expectations of continued strong Chinese demand following on from November’s all time record high of 9.3 million barrels per day supported higher prices.

Natural gas broke above the 60p per therm level on December 2 for the first time since February 2009. The average price for the commodity for the month was 61.76p per therm on the back of the prolonged spell of cold weather.

Energy trading analyst with Bord Gáis, Michael Kelleher said: “Oil prices surged higher on increased emerging market demand in Q4 as well as a recovery in US demand, as evidenced by large draws on crude oil stocks. British natural gas prices were up 23% as the coldest December in over 100 years gripped Britain and Ireland.”