Prices of crude oil, natural gas and coal were significantly higher in 2011 than in 2010. The price increase is partly caused by the rising global demand for energy, the Japan earthquake in 2011 and the less favourable exchange rate of the euro against the dollar.
Producer prices fossil fuels and global manufacturing output (volume)
Fossil fuels prices rise more rapidly relative to manufacturing output
The average price of fossil fuels was one quarter up from 2010. Fossil fuel prices partly depend on the global manufacturing output. In general, a higher manufacturing output level leads to an increased demand for fossil fuels. Last year, fossil fuel prices rose more rapidly than the global manufacturing output, because – apart from crude oil and coal – the price of natural gas also rocketed last year, whereas it was still falling in 2010.
The earthquake in Japan in March 2011 boosted the Japanese demand for natural gas. On a global level, more power stations switched to natural gas instead of coal or nuclear energy.
Soaring crude oil prices
Crude oil prices rose again substantially in 2011. Oil refineries paid over 30 percent more than in 2010, when the price of crude oil had already gone up by nearly 40 percent. Prices increases continued into 2011 as a result of insecurities on the international level, e.g. turmoil in North Africa and the Middle East. The crude oil price is generally very sensitive to changes or insecurities with respect to demand and supply.
Producer prices crude oil, natural gas and coal
Prices natural gas and coal increase less rapidly than crude oil price
Gas and coal prices are usually less volatile than crude oil prices, because the price of natural gas is predominantly determined on the European market and coal-producing countries are politically more stable. Last year, natural gas prices rose by 19 percent, coal prices by 17 percent.
Otto Swertz and Ria Smit