The wholesale cost of energy here plunged ten per cent last month, as oil prices continued to slither downwards. The firmus energy index dropped to 98 - a new low in its five year history.
Oil may not be the only fuel consumed in Northern Ireland but it is by far the most dominant. As a result it has a disproportionate influence on the overall energy index, trumping the effect of gas, electricity and coal whose costs are rising modestly as winter stokes up demand.
Past form had suggested OPEC would take decisive action to control unwanted output at its half yearly meeting late last month. In the event the cartel settled for masterful inactivity, a tactic which sent the price of Brent crude down to just over 70 dollars a barrel. OPEC members agreed to maintain their production ceiling next year at 30 million barrels a day. Against sluggish global demand and rising production from other countries, the outcome leaves the world choking on 1.3 million barrels a day it cannot digest.
Despite the charge for a therm of natural gas rising by 7 per cent last month, gas prices were the lowest for any November in the past four years. Two notable factors are playing a role in keeping gas costs subdued. Ukraine’s moves to settle a gas bill with Gazprom makes less likely an interruption to the shipping of supplies from Russia to Western Europe. And more gas is arriving in the UK and the Continent as falling prices in the Far East have sent LNG shippers in pursuit of European markets.
The Far East has also played a role in holding back the price of coal. China is shutting out imports of the fuel sending supplies towards the West. More coal has also been also heading our way as the collapse of the ruble against the dollar made European markets more attractive for Russian producers. Despite mounting stocks, the weakness of the pound lifted the cost of coal in sterling by 4 per cent.
Increasing gas and carbon costs helped to push up the price of electricity in the all island market by 4 per cent. Also playing a role were the usual surges in demand at teatime which drew more expensive generators into the mix. These price spikes however failed to boost overall margins for gas plants whose returns were squeezed by rising input costs and the moderating impact on the market of cheaper coal fired stations.