Energy Costs Will Continue to Negatively Impact Economies both Here in the U.S. and Around the World
It’s an unfortunate truth that energy costs, even though we’ve seen a reduction in price here in the U.S. over the past month or so, will continue to negatively impact economies around the world.
Energy – oil, gasoline, natural gas – will play a large part in what happens with the global economy as we move into the final half of 2022 and 2023.
The U.S. is seeing a slowing of various economic indicators as we begin the third quarter of 2022. And while the prices of oil and gasoline in the U.S. are indicating lower – a positive on its face – it’s important to understand, at least in part, why those prices are dropping. Fear of a global recession where oil and gasoline demand will be greatly reduced is a large factor.
Even with the current lower oil and gasoline prices, we’re still well above levels that the global economies are used to…especially in Europe.
Without a seismic change in a wide variety of economic, political and geopolitical arenas, and quickly, the downward trend will continue for many of the global economies.
CNBC’s Brian Sullivan is one of the better voices when it comes to the energy industry and how related policies and actions can affect everyday citizens. I follow him on Twitter to get his latest takes. His views are always well thought out and based on factual information, leaving out the hyperbole that’s too often found in some reporting. Plus he adds in some interesting tidbits that can make his feed entertaining. He doesn’t post a lot to Twitter, but when he does it’s usually worth a look.
If you have a Twitter account, you can follow him at the link below. Or, if you’re a really early riser, you can catch him on CNBC Monday-Friday (5 a.m. – 6 a.m.) when he hosts “Worldwide Exchange.”
Brian Sullivan’s Twitter Account
Take a few minutes to scroll back through his feed for previous thoughts both energy-related and other. I’m going to bet his feed will be enlightening in the coming months.
Want an example of how energy costs are affecting individuals? Here you go.
We’ve been hearing a lot about how European countries will have to batten down the hatches for the coming winter with regard to energy usage.
Prices are already at astronomical levels for many countries in Europe, and restrictions are being encouraged. One example is the 15% recommendation for the reduction of natural gas usage. While that may not sound like much, for a business, especially one that manufactures goods, that can be a huge hit to productivity. Luckily, right now, that’s just a recommendation, but the warning has been sounded by government officials that it could become a requirement.
Now we’re seeing from Spain, an actual requirement for indoor temperature restrictions backed by significant fines for violating the rule.
Spain Bans A/C Dropping Below 80 Degrees F, Threatens Massive Fines
Citing “a real risk of a natural gas shortage during the coming winter,” the Spanish government has decreed that all shops, department stores, cinemas, hotels and public buildings cannot have air conditioning set below 27 degrees Celsius (just below 81 degrees Fahrenheit) in the summer, heating above 19 degrees in the winter (66 degrees Fahrenheit).
You can read the full article at this link.
Europe is facing a much more difficult energy/economic situation than we are in the U.S. due to its energy generation decisions over the years and its reliance on Russia for large portions of its reliable energy.
Hopefully, something will change so that the significantly detrimental effects won’t be as bad as anticipated for European citizens. And that we, in the U.S., won’t see shockwaves that’ll increase the economic costs we’re already experiencing.
Savings Beagle offers informational pieces like the ones above in our Discussion Board topics, “How’s the Economy?” and “Food for Thought.” Give those, and all our other topic areas a look if interested. You never know what information will benefit you.
Venn diagram image courtesy of Stuart Miles at freedigitalphotos.net
