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Euro insulates Ireland from oil prices

Monday, February 11 10:15:12

The strengthening of the euro in recent weeks has insulated Ireland from rising Brent crude oil and wholesale UK gas prices, the latest Bord Gais Energy Index said this morning.

The index rose by 1pc in January compared to December and is up 4pc compared to the previous year despite a surge in crude oil prices.

"Brent crude oil prices in US Dollar terms rose to over US$115 a barrel recording its highest monthly level since April 2012, as events in the Middle East and North Africa again raised the possibility of an oil supply disruption. The outlook for Brent crude oil prices continues to be difficult to predict. As the geopolitical situation in the Middle East and North Africa becomes increasingly complicated, the embedded US$20 'fear premium' in the price of oil looks set to remain at least in the short-term," said John Heffernan, power trader at Bord Gais Energy.

He said that, overall, Irish consumers were insulated from the full impact of these higher wholesale commodity prices due to a strengthening euro, which outperformed the US Dollar and British Pound.

"The January Bord Gais Energy Index rose 1pc, but if it had not been for a strengthening euro, the rise could have been as much as 3pc, Mr Heffernan added.