Reduced oil demand pulled energy costs down in October

Energy costs here fell by 4% in October, driven by weaker oil prices the latest Bord Gáis Energy Index has found.

Oil fell by 3% over the period because of lower demand caused by the weakening global economy and despite the attack on Saudi oil infrastructure in the middle of September.

Because oil makes up the largest part of the index, this had the effect of dragging the overall measurement down, despite a 6% strengthening of gas prices.

This rise was driven by the sterling recovery that was propelled by the Brexit agreement between the EU and UK that took a no-deal threat off the table.

The researchers predict that while gas prices remain low because of a well-supplied system, they are under significant pressure heading into the winter months, with weak Asian demand and increasing LNG capacity weighing on market sentiment.

Electricity fell 7% during the month as wind generation rose, while coal prices registered the strongest reduction, of 9%, as demand softened.

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