Belfast Telegraph

Oil price slump triggers another drop in energy prices

By Staff Reporter

Falling oil prices have triggered another drop in the index of energy prices compiled by natural gas business Firmus.

Firmus said the plummeting prices could mean consumers put off buying decisions in anticipation of more falls, as well as budget crises in countries dependent on oil production.

The price of a barrel of Brent crude fell 60% in seven months to a low of $45 in December.

John French, firmus energy's director of regulation and pricing said: "Oil prices have dropped so far, so quickly, it is hard to predict just where retrenchment will stop.

"With over-supply being the main cause of the weakening market, much hangs on whether any of the major players are ready to cut their output.

"Saudi Arabia says OPEC won't reduce production even if the price of a barrel falls to $20.

"By contrast the International Energy Agency says lower returns will start to weigh on US shale drillers by the middle of this year. If they respond, as expected, by halting expansion, it should form the basis for an increase in oil prices."

Electricity prices on the Ireland Single Electricity Market were also down 5% in December. Firmus also said warmer weather than usual over the last 12 months had lowered the global demand for natural gas, again keeping a lid on prices.

Coal was also down 9% to its lowest level in over five years, and there could be further decline in prices thanks to the strong dollar.

Belfast Telegraph