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Oil price plunged at the end of the year
statistikk
2001-01-10T10:00:00.000Z
Prices and price indices;National accounts and business cycles;Energy and manufacturing
en
ppi, Producer price index, price trends, inflation, domestic market, export market, economic indicator, intermediate goods, energy goods, consumables, capital goods, metal-working industry, food industry, oil refining, machine industry, mining, metal prices (for example gold, aluminium, copper)Producer and wholesale price indices, Energy , Oil and gas , Business cycles , Manufacturing, mining and quarrying , National accounts and business cycles, Prices and price indices, Energy and manufacturing
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Producer price index, 15 December 2000

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Oil price plunged at the end of the year

The producer price index went down by 2 per cent from November to December - a decrease that mainly was caused by the decline in oil prices. We must return to February 1986 to find a larger drop from one month to another. The 12-month rate went down from 6.6 per cent to 3.8 per cent from November to December.

After a year with high oil prices, In December the average price of crude oil (Brent Blend) dropped by almost 23 per cent (measured in NOK) on the London Spot Markets (LSM). Apparently, there is no single cause for this relatively dramatic decline, but larger stocks in the US as well as forecasts of warmer weather are possible reasons. Despite this decline, the average oil price in 2000 was about NOK 250 a barrel.

For the group oil extraction, mining and quarrying the index went down by 12.2 per cent. The 12-month rate thereby dropped from 24.9 per cent in November to 6.9 per cent in December.

Decrease in manufacturing prices

Manufacturing prices went down by 0.6 per cent from November to December. The 12-month rate decreased from 4.9 per cent to 3.8 per cent in the same period.

The decline in manufacturing prices is mostly caused by falling prices of refined oil products, resulting in a 3.1 per cent decline in the group chemicals and chemical petroleum, coal, rubber and plastic products. The prices of these products have also dropped on the LSM, unleaded gasoline by about 22 per cent, gas oil by almost 18 per cent, and heavy fuel oil by about 14 per cent (all measured in NOK).

Another group with price changes worth mentioning is manufacture of basic metals. Here, the decline was 0.7 per cent the same as last month. The 12-month rate went down from 6.6 in November to 4.9 in December. In the group manufacture of paper and paper products, printing and publishing prices rose by 0.3 per cent. In the other groups there were only minor or no changes.

Oil extraction, mining and quarrying vs. Manufacturing (January 1990=100)

The oil price and the development of the total index

The total index dropped as much as 2 per cent this month, mainly because of a decrease in the price of oil and oil-related products. The figure illustrates how the oil price has influenced the total index historically. While the producer price index from one month to the next may be strongly influenced by the development in the oil prices (represented by the development in the group oil extraction, mining and quarrying), the long-term tendency is to a great extent determined by the progression in manufacturing prices.

Producer price index. 1981=100
  December 2000 Changes, per cent
  November 2000-December 2000 December 1999-December 2000 January-December 1999 - January-December 2000
Total index 179,2 -2,0 3,8 7,0
Oil extraction, mining and quarrying 131,5 -12,2 6,9 33,5
Manufacturing 184,5 -0,6 3,8 4,7
Manufacture of food, beverages and tobacco 207,1 - 2,2 0,7
Manufacture of textiles, wearing apparel, leather and leather products 161,0 0,1 1,2 0,8
Manufacture of wood and wood products 193,5 0,1 2,4 2,5
Manufacture of paper and paper products, printing and publishing 211,9 0,3 4,4 4,2
Manufacture of chemicals and chemical petroleum, coal, rubber and plastic products 154,2 -3,1 8,7 16,8
Manufacture of mineral products 219,0 0,1 1,7 1,5
Manufacture of basic metals 146,7 -0,7 4,9 8,6
Manufacture of fabricated metal products, machinery and equipment 193,8 - 2,6 1,9