January 5, 2015 | U.S. Energy Information Administration | Rebecca George
Plunging oil prices dominated the news cycle in the last few months of 2014. Many other commodities – like grains and metals – fell, too. The Energy Information Administration reports that prices for energy commodities dropped faster than non-energy commodities.
The S&P Goldman Sachs Commodity Index for energy, which includes crude oil, natural gas and heating oil, fell 43 percent last year, compared to grains, which fell only eight percent. The EIA reports:
Price movements in major commodity groups often move together when there are strong underlying trends in global economic growth. At times, however, commodity prices can deviate from one another as supply-side factors unique to a particular commodity or group of commodities arise.
Which is exactly what happened with oil. Energy prices are tightly integrated into the economy at large and operating under forces that don’t affect other sectors.
Inside Energy has been analyzing the implications of falling oil prices over the past few months. Here are some of the highlights: