Advanced geothermal: Correlation
Prices it moves with, and why
Advanced geothermal, enhanced and closed-loop systems, depends on deep drilling and fracturing borrowed from shale oil and gas. Drilling rates and rig costs set its cost; it is still at demonstration stage with early power deals.
Proxy US PPI: drilling oil and gas wells index (BLS base period =100) · monthly, Jan 2006 to Sep 2026There is no free public price for advanced geothermal itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item.
What its price moves with
Selected linkAdvanced geothermal and Crude oil
Monthly changes 0.11 little or none correlation 12-month changes 0.37 weak correlation Last 5 years 0.07 monthly changes Lead or lag +3 mo Crude oil tends to lead by 3 months (r 0.18) Price function, Jan 2006 to Sep 2026 Advanced geothermal ≈ 159.8 × (Crude oil)0.19 R² 0.31 On this fit, a 10% higher crude oil price goes with a 1.8% higher advanced geothermal price over the long run. Units: index (BLS base period =100) and $/bbl.Chart: Advanced geothermal and Crude oil prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: Advanced geothermal price against Crude oil price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Advanced geothermal uses oilfield rigs and crews, whose prices follow oil drilling. The proxy, a US index for drilling oil and gas wells, lags oil: oil leads by about 3 months, with monthly moves at 0.11 and yearly at 0.37.
little or none co-movement month to month · 249 months Show chartsHorizontal drilling and fracturing from shale gas made enhanced geothermal possible. The drilling proxy and the WTI price share the drilling cycle, with yearly changes correlating at 0.33. Shale firms are moving into it.
little or none co-movement month to month · 249 months Show chartsGas drilling also uses the same rigs and services, and gas prices drive US gas drilling. The drilling proxy and the gas price correlate at 0.12 monthly and 0.41 over a year.
little or none co-movement month to month · 249 months Show chartsCasing and tubing for deep hot wells are steel, a large part of well cost. The drilling index and steel correlate at 0.10 monthly and 0.30 yearly. Hot wells need special grades.
little or none co-movement month to month · 249 months Show chartsAdvanced geothermal aims to feed power plants away from natural hot springs. The drilling proxy and the turbine proxy show little link, with yearly moves at 0.28, as they are different US industries.
little or none co-movement month to month · 184 months Show chartsFracturing fluids, drilling muds and well cements come from oilfield chemical suppliers. These are a recurring cost when creating deep reservoirs. Their prices follow the oil drilling cycle, so busy shale years raise costs for geothermal developers.
Not enough overlapping price history to measure.How to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.