(Credit: Pixabay)Energy prices in 2021 rose more than any other commodity used by most industries.
The surging energy prices were driven in large part by the increased demand created by economic recovery from the COVID-19 pandemic as well as growing demand for crude oil and natural gas that outpaced production, according to the Energy Information Administration. The prices tracked in the S&P Goldman Sachs Commodity Index (GSCI) rose 59% from the first day of trading in 2021 and by comparison most other commodity prices grew by 20%.
The energy index group made up 54% of the GSCI, and energy prices increased by more than twice as much as the industrial metals index, the commodity that saw the next highest growth. The precious metals index was the only area to see a decline in 2021.
The energy prices were generally related to two crude oil benchmarks, the West Texas Intermediate and Brent, which made up nearly 70% of the GSCI. Prices for petroleum products, including ultra-low sulfur diesel, which is used as a benchmark for heating oil trading, increased the most in 2021.
Natural gas prices increased the least among energy commodities, but still rose at a 38% clip.
In 2021 the higher prices for gas and coal as well as rising carbon prices in Europe led to increased electricity rates, the International Energy Agency says. That issue led to global power crunches, especially in Europe and China.
The EU specifically addressed the growing concerns, vowing to speed up the implementation and use of renewable energy sources. China cut power supply for a time, which slowed manufacturing and raised global supply chain concerns.
The EIA says other factors for the increased energy prices include weather distributions, such as the Texas winter storm in February and Hurricane Ida. Energy resiliency and dealing with natural disasters were part of an efficiency roadmap the United States government put out in the fall of 2021.
Overall coffee was the only commodity price that increased at a faster rate than energy.
