Natural gas prices are experiencing a historic surge, and that’s bad news as fuel costs are already at record seasonal highs in most major markets and are likely to rise further, threatening the recovery from the Covid-19 pandemic.
The coming winter could give the world a painful lesson in how gas has become widespread and vital to the economy, reported Bloomberg.
Affordable prices can lower households’ spending and lower their wages through inflation, giving central bankers some tough policy choices. Worse yet, real supply shortages could disable large parts of the industry, or even trigger blackouts in developing countries, potentially leading to social unrest.
“Energy lies at the base of the economy,” said Bruce Robertson, an analyst at the Institute for Energy Economics and Financial Analysis. “High energy prices reverberate through the supply chain” and could put a dent in the nascent recovery, he said.