The total price increase in the PPI resulted mainly from higher prices within the extraction of crude oil and natural gas, which all together rose with 16.3 per cent in October. Measured in NOK the price of oil in October was at its highest level since March of 2012. The price of natural gas continued its rise as well, and in October the price rose for the sixth month in a row.

Metals prices continue to rise

Manufacturing prices rose with a total of 2.2 percent in October. The largest contribution to the increase in manufacturing prices mainly came from the manufacturing of basic metals, with an increase of 9 per cent. Iron and steel has increased some the last few months, which is due to the increased prices of several alloys that are included in the manufacturing of, among other things stainless steel and carbon steel, says adviser Monika Græsli Engebretsen.
The main explanation still looks to be that the available capacity is lower than demand, which has picked up sharply over the last months.

Figure 1. Price index. 2015 = 100

Lower power prices in October

Within power supply the prices fell with 18.2 per cent from September to October. Both the spot price from Nord Pool as well as the power prices offered to Norwegian households fell quite a bit this last month. The weekly rapports from the Norwegian Water Resources and Energy Directorate (NVE) show that during October there were several different circumstances that contributed to the reduction in prices. There was among other things high production of electricity through wind power in Sweden and mainland Europe for some weeks. Else, the mild weather in southern Norway and the lower consumption of electricity than what is normal for this time of year, as well a slight increased filling degree in Norwegian water reservoirs due to more rainfall