Natural gas prices are undergoing a historic surge, and it’s bad news for everyone from ceramic makers in China to customers of patisseries in Paris.
The cost of the fuel is already at record seasonal highs in most major markets and looks likely to rise further, threatening to dent the recovery from the Covid-19 pandemic.
The coming winter may give the world a painful lesson in just how pervasive and vital gas has become for the economy. Unaffordable prices could crimp households’ spending and erode their wages through inflation, giving central bankers some difficult policy choices.
Worse still, actual supply shortages could idle swathes of industry, or even trigger blackouts in developing countries, potentially causing social unrest.
“Energy lies at the base of an 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 dent the nascent recovery, he said.
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