Higher prices on crude oil and natural gas

Published:

10 December 2020

The producer price index (PPI) increased by 4.5 per cent in November, mainly due to higher prices on crude oil and natural gas as well as refined petroleum products.

Written by: Elisabeth Mælum

Full set of figures
Producer price index

Series archive
Producer price index (archive)

The price on natural gas reached its lowest level until now in July this year. Since then, the price on natural gas has increased gradually. From October to November, the price on natural gas rose by nearly 35 per cent. The price on crude oil increased as well during the same period, according to new figures from the Producer price index.

Highter prices on crude oil and natural gas can be explained by a general optimism in the world market, both after the election in the USA, but also due to the corona vaccines with promising test results.

Figure 1. Price index. 2015=100

	Total PPI	extraction of oil and natural gas
Jan.15	100	98.9
Feb.15	102.1	104.3
Mar.15	103.5	107.4
Apr.15	103.5	107.4
May.15	103.4	108.3
Jun.15	103.7	110.5
Jul.15	101.4	105.1
Aug.15	97	93.9
Sep.15	96.8	94.1
Oct.15	97.4	93.6
Nov.15	97.8	92.9
Dec.15	93.4	83.5
Jan.16	89.2	70.8
Feb.16	86.9	68.7
Mar.16	88	70.6
Apr.16	88.7	71.4
May.16	91.1	75.8
Jun.16	93.7	80.5
Jul.16	94.1	80.7
Aug.16	92.4	78.2
Sep.16	91	75.5
Oct.16	93	78.8
Nov.16	95.3	82
Dec.16	100.2	96.2
Jan.17	100.5	94.5
Feb.17	103.2	99.3
Mar.17	102.2	98.1
Apr.17	100	90.8
May.17	99.2	88.5
Jun.17	96.7	83.8
Jul.17	95.7	80.8
Aug.17	96.1	81.4
Sep.17	98.9	87
Oct.17	101.3	95.2
Nov.17	104.6	101.5
Dec.17	107.6	108.9
Jan.18	110.9	116.1
Feb.18	108.1	105
Mar.18	108.7	106.9
Apr.18	112.3	119.2
May.18	113.6	121
Jun.18	116.1	122.6
Jul.18	117.3	123.9
Aug.18	118	126.2
Sep.18	119.7	131.6
Oct.18	124.1	144.7
Nov.18	120.2	131.4
Dec.18	115.9	119.3
Jan.19	116.3	120.8
Feb.19	116.8	122.2
Mar.19	114.4	115.7
apr.19	115.2	116.9
May.19	114.1	113.7
Jun.19	108.5	99.8
Jul.19	107.2	96.8
Aug.19	106.9	95.8
Sep.19	106.9	96.3
Oct.19	107	93.3
Nov.19	108.8	96.9
Dec.19	113.3	107.8
Jan.20	111.8	105.1
Feb.20	108.1	93.5
Mar.20	100	72.3
Apr.20	96.7	65.9
May.20	94.1	60.3
Jun.20	92.9	59.2
Jul.20	92.9	57.1
Aug.20	94	59.9
Sep.20	96.6	65.2
Oct.20	100.6	76.6
Nov.20	105.1	90.3

Higher prices within manufacturing

Prices within manufacturing increased by 1.2 per cent in November. This was mainly due to higher prices on refined petroleum products, with an increase of 8.3 per cent. The price development in this industry is closely correlated with the price on crude oil. Within basic metals, prices rose by 2.5 per cent. The price increase was mainly due to higher export prices on non-ferrous metals such as aluminum products and zinc.

Other industries with price increases in November included the chemical and pharmaceutical industries as well as within fabricated metal products.

Within mining support services activities and non-metallic mineral products, there was a reduction in prices in November.

High wind power production in November

Prices within power supply fell by almost 10 per cent from October to November. The export prices of power supply in PPI are only affected by the spot price from Nord Pool, where prices fell by 58 per cent in November.

There were several reasons for reduced electricity prices in November. In their weekly reports (in Norwegian), the Norwegian Water Resources and Energy Directorate (NVE), writes about high wind power production in the Nordic region and a historically high water reservoir level in Norway in week 47. In addition, the sustained planned maintenance of the Swedish power grid has led to limitations in transmission capacity between Eastern Norway and Sweden during November.