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Correlation between gas prices and oil products' prices

This graph plots the evolution of the representative price of long-term natural gas supply contracts in Europe (BAFA: import price in Germany), of the market price of natural gas on the London Stock Exchange (Spot NBP) and the price of petroleum products represented by the Brent index.

Sources: SDES, World Data Bank, Energy Information Administration (2021)

Sources: SDES, World Data Bank, Energy Information Administration (2021)

Analysis

This indicator highlights a strong correlation between the prices of gas and petroleum products. The prices of long-term natural gas supply contracts are indexed to the price of Brent. A lag of 3 to 6 months in long-term contract prices on that of Brent is due to a smoothing of the indexation formulas.

 

The health crisis linked to COVID-19 has affected all markets. The fall in prices is clearly visible in the years 2019 and 2020. The main reason for this fall in oil and gas prices is the slowdown in the world economy which has caused an overabundance of supply and consequently a violent fall in prices. .

In 2021, the various prices begin to return to their pre-crisis level.

Open data access