Conventional oil and gas production: Correlation
Prices it moves with, and why
Conventional oil and gas producers earn the world oil price, set by OPEC+ supply, global demand and inventories, while costs are drilling, steel, services and taxes. Gas from these fields is often sold on regional or oil-linked contracts.
Proxy Crude oil, average spot US$/barrel · monthly, Jan 2006 to Sep 2026There is no free public price for conventional oil and gas production itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item.
What its price moves with
Selected linkConventional oil and gas production and Crude oil
Monthly changes 0.99 strong correlation 12-month changes 1.00 strong correlation Last 5 years 0.99 monthly changes Lead or lag none No clear lead or lag Price function, Jan 2006 to Sep 2026 Conventional oil and gas production ≈ 1.05 × (Crude oil)0.98 R² 0.99 On this fit, a 10% higher crude oil price goes with a 9.8% higher conventional oil and gas production price over the long run. Units: US$/barrel and $/bbl.Chart: Conventional oil and gas production 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: Conventional oil and gas production 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.Producers sell crude at world prices, and the proxy is the average of Brent, Dubai and WTI. It moves almost as one with Brent, with monthly changes correlating at 0.99, so this mainly confirms the benchmarks track each other.
strong co-movement month to month · 249 months Show chartsMany oil fields also produce associated gas, and gas fields yield condensate. The European gas price follows oil only loosely month to month (0.15), but yearly moves correlate at 0.60, partly through oil-indexed gas contracts.
little or none co-movement month to month · 249 months Show chartsRefineries turn crude into fuels, so their output prices follow the crude they buy. The US refinery price index follows the crude proxy closely: monthly moves correlate at 0.80 and yearly moves at 0.95.
strong co-movement month to month · 249 months Show chartsPropane and butane are separated from oil and gas at processing plants and refineries, and LPG export prices often follow crude. Mont Belvieu propane and the crude proxy correlate at 0.66 monthly and 0.81 yearly.
moderate co-movement month to month · 248 months Show chartsWells, casing, platforms and pipelines need large amounts of steel, and drilling booms lift demand for pipe. The US steel index and crude proxy show a yearly link at 0.61, a common driver more than a cost link.
little or none co-movement month to month · 249 months Show chartsDrilling muds, cements, corrosion inhibitors and demulsifiers are bought by producers in volumes that rise and fall with drilling activity. Oil prices drive this demand, so oilfield chemical suppliers follow the drilling cycle.
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.