Energy prices continue to drop
Significant price reductions on most energy goods caused a further decrease in the Producer Price Index in April. Natural gas had a positive price development, but only due to a weak Norwegian krone.
The price of crude oil continued to decrease, and the price in April 2020 was about 50 per cent lower than the price level
in April 2019. WTI did at some point in April reach a negative price. The Brent Blend didn't follow all the way, but had a
significant price drop as well, of more than 18 per cent. Lower demand due to the global lockdown may have contributed to
the price reduction in April. Currency fluctuations had a visible effect as well: the price of natural gas measured in USD
dropped slightly in April, but in NOK, the price actually had a marginal increase.
Refined petroleum had the biggest impact on the PPI in April: with a price fall of 31,8 per cent. The same trend was seen in the electricity market: the system price at Nord Pool dropped by more than 40 per cent from March to April.
Figure 1. Price index. 2015=100
|PPI excluding energy goods||Energy goods|
Price increases in manufacturing
Despite the decline in energy prices, most industries within manufacturing had a positive price development in April. Food industry, metal industry and several other industries not directly related to energy production, had price increases. This may indicate that Norwegian manufacturing industries are not as badly affected by the corona pandemic as the energy sector. Furthermore, the weak Norwegian currency may have improved the profitability of Norway's export businesses. Imported goods, on the other hand, may have become more expensive measured in NOK. During uncertain times, people tend to buy more alternative currencies. This reflects on the gold price, which has increased by more than 30 per cent so far this year.