The graph above tracks gasoline prices in Europe and the U.S. An American looking at the graph may be puzzled by the much smaller decline in Europe than in the U.S. Why the difference? One reason is that taxes on fuel are much higher in Europe, which means that a large fraction of the cost there hasn’t changed. The graph below shows another reason: The price of crude oil in euros actually hasn’t changed that much. The dollar price has declined a great deal, but the dollar has also strengthened significantly with respect to the euro, canceling out much of the decline. Indeed, the dollar price fell from about $110 to about $50. The euro price fell much less, from €80 to €50.
How these graphs were created: For the first graph, search for “europe transportation fuel price” and “gasoline CPI” (monthly, not seasonally adjusted) and add the series. To align both series at the recent peak price for the U.S., choose “Index (Scale value to 100 for chosen period)” for the units and 2014-06-01 for the date. For the second graph, search for “oil Brent” and select the monthly series. Then add the same series again as series 2. Finally, add the dollar/euro exchange rate to series 1 and apply transformation a/(b). (The parentheses in the formula simply make the label in the graph easier to read.)
Suggested by Christian Zimmermann.
Norway is a small country with an oversized oil sector. So how do fluctuations in crude oil prices affect its economy? It is too early to look at Norway’s GDP for any effects from the recent drop in oil prices. But we can look at its stock market. The graph above shows the price of North Sea oil (deflated to remove the general increase in prices) and the index of the Oslo Stock Exchange (converted to U.S. dollars and deflated as well). It is pretty obvious that there’s a strong relationship between the two. The relationship is even more obvious when you look at the scatter plot below, where each point corresponds to a date and each axis corresponds to one of the time series.
How these graphs were created: Search for “Share price Norway” and add the monthly index series to the graph. Note: We’ll use only monthly series here. Then add the series “Norway exchange rate” and “CPI United States” to series 1. Apply transformation a/b/c. Now select “Brent oil price” as series 2 and add “CPI United States” to it. Apply transformation a/b. Use the right y-axis for this series. (You may remove the axis labels, under the graph settings tab, if you think things have become too crowded with all these transformations.) Repeat these steps to create the second graph, but switch graph type to “Scatter” under the graph settings tab.
Suggested by Christian Zimmermann
View on FRED, series used in this post: