David Rewcastle, a professor in the economics department at the University of New Haven, explained that it’s not just the U.S. experiencing higher energy prices. David Rewcastle said Europe is getting walloped even worse by the rising costs.
The winter ahead could be costly for homeowners in the United States. As supply is unable to keep pace with demand, oil and natural gas prices continue rising. This will only increase as temperatures drop and heaters are turned on in homes.
The cost of natural gas, which is used to heat homes and generate electricity in the United States, has risen by approximately 180% over the past year. Oil prices have also increased significantly, with crude oil more than doubling in price since last year.
Many consumers will feel the pinch as September winds down and fall kicks in.
After a winter that was longer than expected and colder, Europe’s energy crisis is being caused by a shortage of natural gas.
This problem was made worse by a less windy summer than expected. Wind turbines were unable to generate as much energy and had to burn more natural gas. The Russian invasion of Ukraine exacerbated the situation.
Europe has been trying hard to purchase more natural gas, which has led to bidding wars that pushed up the cost of natural gas until Europe set up a gas price cap, which led to lower gas prices.
Increased demand from overseas has led to increased U.S. exports to Europe.
Exports of Natural Gas in the United States averaged 496.44 USD Million from 1989 until 2022, reaching an all-time high of 7501.54 USD Million in August of 2022 and a record low of 9.99 USD Million in January of 1996.
Rewcastle also said the global energy crisis could portend other sectors of the economy also being negatively affected. “If you look in front of every recession, you will find oil shock,” Rewcastle said. “There are hardly any recessions that you will not find an oil shock preceding.”
Not only is the cost to power one’s house rising because of the higher energy prices, but they also have an impact on other consumer goods.
For example, natural gas is used to produce fertilizers used to grow crops, and higher oil prices are reflected in the higher costs of goods that need to be shipped to stores.
About David Rewcastle
David Rewcastle of Darien, Connecticut, is an Equity and Fixed Income Analyst with a background in Finance, Economics, and Middle East Studies. David won the Wall Street Journal’s “Best On The Street” award for portfolio performance in the Oilfield Services Sector.
He also has been awarded the top-ranked stock picker for the Gas Utility Sector by Starmine/Forbes Magazine, and Starmine/Financial Times rated David as the #3 analyst/stockpicker in the US Gas Utility sector.