Natural gas: Correlation
Prices it moves with, and why
European gas is priced at trading hubs such as the Dutch TTF by pipeline and LNG supply, storage levels, weather and the cost of competing fuels. Since losing most Russian pipeline gas, Europe competes with Asia for LNG cargoes.
Market price World Bank Pink Sheet: Natural gas, Europe $/mmbtu · monthly, Jan 2006 to Sep 2026What its price moves with
Selected linkNatural gas and Thermal coal
Monthly changes 0.37 weak correlation 12-month changes 0.81 strong correlation Last 5 years 0.47 monthly changes Lead or lag none No clear lead or lag Price function, Jan 2006 to Sep 2026 Natural gas ≈ 0.130 × (Thermal coal)0.94 R² 0.58 On this fit, a 10% higher thermal coal price goes with a 9.3% higher natural gas price over the long run. Units: $/mmbtu and $/mt.Chart: Natural gas and Thermal coal 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: Natural gas price against Thermal coal 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.Power generators switch between gas and coal depending on which is cheaper after carbon costs, and both are traded as seaborne fuels. They move together more than most pairs here: monthly changes correlate at 0.37 and yearly changes at 0.81, with recent years tighter (0.47).
weak co-movement month to month · 249 months Show chartsLNG is now Europe's marginal supply, so cargoes must be priced high enough to pull them away from Asia. Japan's import price is mostly oil-linked and adjusts slowly, so monthly moves correlate at only 0.15, but yearly changes correlate at 0.71.
little or none co-movement month to month · 249 months Show chartsGas is both feedstock and fuel for ammonia, and so most of a nitrogen plant's cash cost; when European gas soared in 2022 many plants there shut. The proxy, a US nitrogen fertiliser index, reflects cheaper US gas, so monthly moves correlate at 0.13 though yearly changes reach 0.78.
little or none co-movement month to month · 249 months Show chartsMany older European and most Asian long-term gas contracts were priced off oil, and gas competes with oil products in industry. Monthly moves correlate at 0.16 and yearly at 0.60, with oil tending to lead by about 2 months, a trace of those lagged formulas.
little or none co-movement month to month · 249 months Show chartsBiomethane is upgraded biogas that can replace fossil gas in the grid, and it sells at the gas price plus subsidies or green premiums. The proxy used is the US Henry Hub gas price, which correlates with European gas at 0.20 monthly and 0.69 yearly, the regions being linked through LNG trade.
weak co-movement month to month · 249 months Show chartsHow 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.