Price increase on natural gas

The price of crude oil fell in August. Measured in USD the oil price ended at just over 60. The price drop happened after the US president threatened further escalation of the trade war with China over new customs duties on Chinese goods.

The price indices within mining support service activities, in addition to the production of non-metallic mineral products also contributed to the overall drop in the total PPI, with decreases of approximately 2 and 11 per cent.

Is the trend of falling gas prices about to reverse?

The price of natural gas increased from July to August after a sharp falling curve from October last year. From October 2018 to July this year, the price of natural gas fell by around 60 per cent. Not since August 2009 the price of natural gas has been at such a low level as we saw last month. A flood of gas to Europe from countries such as the United States, Australia and Russia, in the form of LNG, put pressure on Norwegian gas prices as well. Several European countries imported gas with the view that winter 2019 could be as cold as last year. However, this did not happen, which resulted in large inventories and hence a reduction in prices.

Higher electricity and metal prices

Electricity prices went up by 2.4 per cent from the previous month and helped to curb the overall fall in PPI from July. The price of electricity increased for several reasons. The spot price at Nordpool went up. So did the price of electricity for Norwegian households, as well as higher prices for the future fixed-price contracts associated with the power-intensive industry. Prices within basic metals increased mainly due to higher prices on non-ferrous metals.