Global Energy Markets Enter Winter Of Discontent – Forbes

by | Sep 4, 2022 | Energy

LONDON, ENGLAND – AUGUST 26: Protesters hold placards during a demonstration against rising energy … [+] prices outside Ofgem’s headquarters in Canary Wharf on August 26, 2022 in London, England. Ofgem announced the new rate for the energy price cap this morning rising by 80% from £1971 to £3549 per year from 1 October. (Photo by Rob Pinney/Getty Images)Getty ImagesEnergy costs were painful this summer, but they are shaping up to be even worse this winter.

Oil and natural gas supply markets remain incredibly tight with little relief in sight. Consumers should brace for a winter of discontent and rising prices.

That’s because Russia sits at the heart of both markets, and Moscow’s ability to impact prices and supply beyond its regional market of Europe is becoming more evident by the day as demand picks up into the fall and winter.

In oil markets, consumers have seen falling prices at gasoline pumps since June. The national average for regular unleaded is below $3.83 a gallon – after hitting a record of more than $5 a gallon earlier this summer.

Traders work in the energy options pit on the floor of the New York Mercantile Exchange in New York … [+] City. The tight oil market means oil prices remain vulnerable to supply disruptions. (Photo by Spencer Platt/Getty Images)Getty Images
But fears of economic recession, not supply and demand fundamentals, are responsible for most of the drop in petroleum commodity prices. Inventories for crude oil and refined products like gasoline, diesel, jet fuel, and heating oil remain critically low.
While consumers can choose not to drive to some extent to reduce their exposure to high gasoline prices, they have less choice in the winter when it comes to heating their homes and offices.
It’s no surprise that the Biden administration is worried about t …

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