Energy index hits low as oil prices ‘freefall’

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The wholesale cost of energy in the province plunged 10 per cent last month, as oil prices continued to slither downwards according to the latest firmus energy index.

The index produced by the natural gas supplier dropped to 98 - a new low in its five year history as oil, the most dominant factor in the local marketplace, imposed what the firm said was a “disproportionate” influence on the overall energy index, trumping the effect of gas, electricity and coal whose costs are rising modestly as winter stokes demand.

Commenting on the report firmus director of regulation John French, said OPEC had failed to limit suppply as had been assumed.

“Is the cartel hoping that shale oil producers in America will suffer with low cost oil? If so, it may well be mistaken. The International Energy Agency says that only a tiny fraction of US tight oil producers need prices above $80 to be profitable.”

The report said that despite a therm of natural gas rising seven per cent last month, prices were the lowest for any November in the past four years. Two key factors in keeping gas costs subdued it said were Ukraine’s moves to settle its bill with Gazprom, making less likely an interruption to supplies from Russia to Western Europe and more gas arriving here as falling Far East prices send LNG shippers in pursuit of other markets.