Share Surge in Energy Prices Threatens Economic Recovery and is Already Slowing Growth
Source：CNBC
From：Taiwan Trade Center, Los Angeles
Update Time：2021/11/27
Fuel prices have risen steadily over time and seem far from stalling that progression of growth. Coincidentally, oil, natural gas, and coal prices have risen as well despite supply chain shortages. These conditions beg to question the fate of the economy and a possible incoming recession.
Though the state of the economy is in question, many economists share that the sudden rise in energy prices will not be the end all be all of the U.S economy. Higher energy prices will surely, however, make a stronger impact globally in destinations like Europe as they experience a steep rise in natural gas prices.
Bruce Kasman, a JPMorgan Chief Economist, specified that the source of the problem was generally not related to rising oil prices but rather the spiking of oil prices—which indicates a supply-driven issue.
As winter months emerge, American consumers will have more energy-related expenses to care for, such as gas, heating, and electricity. With oil prices 65% higher than before, and natural gas prices 112% higher than before, the concerns of a recession become legitimate. Anwiti Bahuguna, head of the multi-asset strategy at Columbia Threadneedle, says it would have to take the doubling or tripling of oil prices to see the beginning stages of detrimental growth. Economists alike share that in addition to steep energy price increases, the trend would have to exist for a substantially longer period, shedding light on a possible recession.
Although internationally, Europe and Asia have proven some risky and undesirable developments in the energy sector, the changes that the U.S energy industry endured have proven to be an invaluable decision in cushioning the effects of the energy crisis.
As a major producer of energy, the U.S. produces 11.3 million barrels of oil and other refined products. Additionally, the U.S also continues to import 3.8 million barrels of crude. Europe and Asia have become dependent on the U.S as an energy supplier, this reinforces the dominance that the U.S. has in the industry. Higher than average fuel prices have been reflective of the energy industry and the relationship it has with the domestic market. Currently, the U.S supply chain is considerably low, but the high prices have yet to be proven detrimental to the country. JPMorgan projects a fourth-quarter gross domestic product growth by 3.5% next year as well as a CPI gain of 4% in the second half of the year.
Source: https://www.cnbc.com/2021/10/12/sharp-surge-in-energy-prices-threatens-economic-recovery-and-is-already-slowing-growth.html