Topic: Natural Gas, Electricity, Oil / Gas & Inflation- Nightmare Scenario (Read 324 times)

Yeah unfortunately I believe your right, many economists are predicting that it's going to take some time before we are out of this mess.  Right now we are at a 40 year high when it comes to inflation, so doing as many little things as you can to save money will all add up.



This is certainly not a bad idea. However when it comes to metals, I'm not a big fan of owning equities versus owning the real thing.  The problem with equity precious metal products like mutual funds, ETFs etc is that they tend to sway too much with the market, where as the physical metals do not.  Whenever there is time of panic in the markets, even though these types of equities house hedge type items, people will still panic and sell them off, hence moving with the markets.  I agree overall though, these are nice hedge products.

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A very easy path for partial inflation protection for Americans, or those with access to US investments, would be the ETFs (all by Invesco) of commodities:

Ticker: DBA (an ETF of agricultural commodities)
Ticker: DBB (an ETF of base metals like copper and nickel)
Ticker: DBC (an ETF of many commodities including crude oil)

I have bought some DBA and DBC for my grandchildren as a partial hedge against inflation.  Yes, these are "paper commodities", but they provide exposure to inflation hedges beyond the more well known precious metals.

It won't stop anytime soon so what you can do is accept the situation and find ways how to lessen the burden of these increasing prices of all the commodities around you. Try to look for options where you can save money, like if you have a small land or garden, start planting vegetables or any crop that you can eat so you don't need to buy anymore from the market. Don't buy unnecessary things, just be contented on what you have. Sell those things or gadgets that you feel you don't need anymore and are just cluttering around your house. Try to live a minimalistic life. It will also give you more peace of mind. Don't wait for the government's aid because it may not come.

It's rising even higher in our country and most of us are suffering. Every economic sector is affected and it even affects our daily living. The government should function this time but instead of doing something, they're also taking advantage of it together with huge businesses. I hope that this nightmare would come to an end because, to be honest, it's worse than the pandemic.

I'm not so sure that would actually be the case.  I do know that some people have utilized bitcoin mining in their home as a source of heat.  I know some people are even renting out their places to co-live with someone who promised to mind bitcoin in their home just to heat it up.  I think overall however that the electricity costs would out pace the cost of the natural gas.  Of course it all depends on home much power ones using.  Then you have to think about the cost of the mining equipment, fixing issues with the equipment over time etc etc.  It is an interesting thing to ponder though.

Well of course running out of food and power would be a true nightmare.  There are many things more "nightmarish" than what I've been speaking about here.

I think the whole world is suffering from the economic effects of Russia's invasion of Ukraine. The same is happening in my country even if we are highly dependent on Middle Eastern oil rather than Russian oil. My country, the Philippines, is importing most of its oil from Saudi Arabia and then from Kuwait and UAE. Our Russian oil import only accounts for a small percentage and yet when the crises in Ukraine happened, the price shot up all of a sudden.

At a certain tipping point, it could become cheaper to heat ones residence with bitcoin mining rigs, than it is to heat via fossil fuels. Wouldn't that be an ironic turn of events? (Sorry to say water is wet, but I hope everyone knows they can greatly save on heating and cooling costs by improving residence insulation)

My food costs have near to doubled in some cases. Gas prices are up. Everything is up. I've expected these trends for many years and not done a good job preparing. Have some solar capacity to offset rising electrical costs. Limited food production to offset rising market costs. What I currently have can be expanded on. If circumstances continue to deteriorate, hopefully I won't be too badly off.

The region I reside in is said to have sufficient capacity for 7 days of food and power, if container shipping and supply lines were completely cut. I would say that would be the true nightmare scenario.

Imagine you would walk by the end of the month out of your workplace with a check that size!
You're from the US, you pay 5$ for a gallon, imagine living in the Philippines or India with 1.35-1.65 per liter, but with an average wage of ~$500 at best.

The outcome of this is pretty simple, some countries will simply cut consumption in half as they will not afford it anymore, once that happens there will be an imbalance in production and demand, oil will again go down, of course not as fast as the panic buy happened but it will, it makes literally no sense for consumption growth to keep up with the production growth that is on the horizon, not at these levels.

Oil has been over 100$ in 2014-2015 only to fall back to 45 and then 30 one year later, the same story in 2008.


That's an illusion, the government is actually paying the difference from your pocket but you don't realize that right now, you will soon do when they will be out of money and they will need to increase taxes to cover that up. But yeah, rather than gasoline, sunflower oil has become something "to die" for there, right?


Fearmongering, two world wars 7 economic crises after which the world hasn't been set back by even a decade and you think this will push us back a century?
You're overly underestimating the resilience of the economy and the human species.

Yes, friends, hard times are coming. I think soon we will return to several centuries ago. I don't want only to work to pay for gas for my car. And what option remains? Just put some money together for the future and hope that the world will be calm. It is unfortunate that ordinary people can suffer because of political problems.

I don’t think this is going to make a huge deal across the world, at least for the United States and Europe. Here in the United States I believe only 5% of both our crude oil and natural gas comes from Russia. As much as I don’t like paying these extreme prices, losing 5% to the evil empire that is Putin and Russia, I’m fine with that.

True, even though they took this decision in the interest of Ukraine not joining NATO, they have also sacrificed their entire economy.  Even though Russia has stopped exports of its natural resources.  Their economy is also paralyzed so the best solution is to cooperate with economic partners such as China and India.  Europe and the US are their main targets because they have interfered with the sovereignty of their countries by playing games in Ukraine.  Whatever it is I hope it gets better soon, I hope Putin stops it soon.  Because the world will face a long economic crisis

When we were in a Group call with our university teacher in Ukraine he told us how everything is nominal, the price of grains is nominal as well but what they are struggling with is the price of oil and gas ⛽ Makin things more expensive in Ukraine.

It's not just US, UK or other countries as well being affected with the hike in prices but other European countries as well, making it harder to cope and they have to do certain things like :

1. Find other sources to transfer, import the oil/ gas at fine prices
2. Switch to other sources and that too very fast

Russia is still supplying India at good prices to make sure this keeps their economy stabilized and have now asked China for other help as well. Putin might be having side effects of cancer treatment but he is not destroying just Ukraine, he is destroying whole of Russia along with him

Even if they somehow resolve their issues, it is not going to be one day solving and suddenly we are back to regular life. I mean it is going to be long time before Russia and the west. However, people are overreacting the causes of this situation we are in right now. I mean remember the fact that we had gone through much worse before and the life still went on. We literally just passed 2 years where people barely worked and the world still kept turning around.

You have to realize that we are strong united, and when it is a problem that risks everyone, we can solve it. If there are economical problems, we will suffer, but then everything will get better, then suffer again and better again and so forth.

The key thing in everything is to adapt to the existing situation, and that means changing life habits. If the price of fuel is too high for you, try to use public transport more or if you live in a smaller place why not use a bicycle, it is completely free, it is good for health and the environment. As for the price of electricity, you need to turn off all devices that you do not use because they consume even when in standby mode, and replace ordinary light bulbs with energy-saving ones. If you have the conditions set up a few solar panels that will definitely pay off and give you free electricity for years to come.

And what about Bitcoin? Haven't we talked all these years about inflation coming and that it's wise to invest in Bitcoin to preserve and increase the value of our assets? 4-5 years ago you could have $1000 in your wallet or bank, and you could invest it in Bitcoin and worry less about inflation today.

In order to reduce our dependence on everything that others produce and sell to us, we must begin to change and become a society that produces to be self-sufficient at the level of the individual, family, and community.

More likely than not there'll be a major economic crash and recession because of inflation, low oil prices, and the war in Ukraine. That's the worst case scenario. Best case scenario is that Ukraine and Russia can resolve its issue and restore whatever certainty the market had before. That doesn't deal with inflation, but it's a start.

https://tradingeconomics.com/commodity/eu-natural-gas

Natural gas prices recovered a bit but you still see they're above pre-war trading price. My prediction is that these prices won't recover well into the year and onward, if we're lucky.

Dam, that is huge cost for your house. I am not sure what is your location but considering the gas you use it must be cold region and that is why you require so much gas to heat up the house. Well, in my region India, things are already way costly. However we are not that much out of hand as far as LPG is considered. The rates been fluctuated since many months now and we are used to it. Our most of houses use LPG cylinders which are door delivered and run for like a month in middle class family. This adds up the cost of $12.99, for bigger families it could be double lets say nearly $26 a month.

However, electricity and fuel costs are almost as same as yours. I am not sure how good is this comparison considering entirely two different hemisphere and the way trade operates and the way taxes are incurred. But this is what it is as I mentioned above!

I'm glad I don't heat my house with natural gas.
Electricity prices for the households in my country are regulated by the government,so there wasn't any significant increase during the winter.I don't expect any increase anytime soon.
The food price inflation and gasoline/diesel prices going up are the biggest problems where I live.The inflation is going to be nasty.Most of the inflation is actually the merchants spreading panic about having a shortage of food and gasoline and creating price cartels.
Unfortunately the Bitcoin price isn't pumping,in order to help us with this situation.
Let's hope that the war in Ukraine ends after a month or two and the global economy starts getting back to normal.However,I don't expect the inflation to slow down until the end of 2022.
 

Yeah our electricity pretty much doubled since last year. For those with gas guzzlers or heavy SUV they are suffering whenever they are at the pumps. These last few days wherever I go there is always people complaining about the expensive gas prices. You can already see deals on many huge trucks and SUVs with big V8 engines.

What will all this lead to ? Well most likely a recession will follow which will quickly correct all of this. The price of oil will crash. The CPI will be negative most likely and real estate/cars will be cheaper since most people will be out of reach to buy one.

Yes, we are gradually feeling the inflation from commodities in the near future. Although not desirable, perhaps we will still see the global food problem in the future. The developments are terrible, but perhaps we will not be able to change them and have to face them. I personally feel very fortunate to still be able to pay for the necessities of life, but many people don't have that luck.

And now, this war added more reasons to elevate those prices. I think, this crisis will give sufferings to many around the globe. It is not only in the European area but the whole world will suffer. It is like a domino effect everywhere. I guess, we need to live with this situation and make the most what we can do to survive. After all, humans will always adopt the change whatever is happening around him.

It's not just the war causing this. prices of electricity and oil were rising steadily these past 6 months in the EU largely due to many activits calling for the "green energy" and blockading any new research or scanning of new oil fields so what did you expect

more "Green Energy" stuff: Germany shuts down half of its 6 nuclear reactors

Wars bring lack of control, by increasing the price of oil and its derivatives, the cost of living tends to increase, causing inflation little by little we will be noticing it.
The war in Ukraine directly affects Europe, analysts warn that there could be an estimated inflation of 20% and a euro crisis. In the end, in wars, everyone loses, the best thing that could happen is that the aggression against Ukraine ceases and we have a new vision that peace should reign in all corners of the planet. But it is a lot to wait because selfishness never ends.
In view of an impending economic crisis and inflation in my household, we are spending less so we can save for an uncertain future.

It is also the same here where the gas price increases and we have to buy a lot of gas and other important goods to store and when the time comes that the price is very high then we will have something stored safely. The worst part is that when the price of gas increased then it feels like the continuation of the situation were in where the gas price is abused after the typhoon rai hits. During that time many people doesn't have jobs and having hard time saving money for quite some time and slowly recover and yet the price increased again.

Yea, I have 2 cars and the one I like to drive more is being used less and less because of the prices (it uses 10l/100km in town). I bought it because I already had an efficient car that my wife was using to drive to work and wanted something with more power that will handle even better in bad weather and the prices were just 1€/l so I thought to myself why not, we only live once. now it's twice that and going to be even higher if the governments don't lower taxes on fuel so I keep on borrowing wife's car... fck me

If you calculate the full expenses of us in this natural gas, electricity and Cooking gas.Actually their was huge difference now due to war. Their was huge change in the inflation of many country.It's better to use of Electrify vehicle which includes bike and Car.Because the price of Natural gas and petrol was depends on another country. But the electricity mostly control by the own country. And the usage of electricity was not huge.

     As per the meme: beers are now cheaper than gas! Drink! Don't drive! 🤣. Seriously though, here in my country, gas prices are going off the charts. Although most of the people here rely on motorcycles more since it gets through traffic easier and easy to park, it is still a burden for those who use motorcycles for a living. And there's even gon be another price rise in gasoline next week. Seems bicycles are the way to go now. 😅

Would be painful for countries that chose "green" energy.


Heh, now we see a true beneficiary of the war.

Anyway, it is pretty clear that resource market would be rebuilt. The issue is that no one knows how much time it would take and all this time you would have different problems. Such conflicts may last for decades and by the time smart people from the government come and resolve the issue everyone else would loose quite much time / money / efforts etc.

Energy wise I think the problem will be more related to natural gas than oil. The middle eastern countries will just pump more oil and make more money in the process. Getting natural gas from another source is not that easy. It is going to be pain in the short term and in the medium term things will stabalize.

This is surely to affect all continent because it looks like a chain of activities. EU is already going to be affected and that was why they very much reconsidered the sanctions against Russia as Russia when pushed further will cut gas supply to Germany to the rest of Europe and that will have effect to others. However, US is not the only country that has promised to increase production. Saudi Arabia has also done that and OPEC has decided that her member countries would increase production to help the world.

Yeah, we have been feeling the price surge as well. Although it's been going on longer than the recent crisis, this will definitely make it much worse. Not one to look at things solely pessimistically, but it's hard to imagine how 3 years of corona and war in Europe would not trigger a recession. Working from home really helps with saving up on gas and as we are exiting winter in Europe we will have to spend less on heating, but that, unfortunately, can only go as far as the next winter. So without panicking, we might buckle up for a couple of years of an Economic wild ride.

Biden calls the increase in gas prices Putin's increase. This is really terrible, from the sanctions that countries impose on Russia, one can soon conclude that everyone will suffer. And Europe with America, not only Russia. The world is going crazy. But according to Biden, America will increase oil production several times more this year than oil was produced earlier.
Therefore, everyone should be patient, and wait a bit.

Right here in the Philippines, we’ve already felt the impact. The gas prices are going high (but there’s a recent price roll back for a limited amount of time) and some public utility vehicle drivers are already expressing their concern and demanding the Department of Transportation to increase the fare hike or else they will do some kind of a transport strike for a few days.

Good thing that I didn’t sell my e-scooter that I’ve bought sometime last year, but I continually charging it once a month. I only used it like 3x for the purpose of alternative transportation while under strict lockdown (because public utility vehicles are not allowed that time to operate).

The current minimum wage would not be enough for an average Filipino if the gas prices continue to rise, thus increasing transportation fees, etc.

We are now in a stage of uncertainty where we cannot know the repercussions of what will happen in the future.
Central banks are cautious in economic policies.
Oil prices have increased or may increase depending on what will happen in the future.
Therefore, the problem is now greater than energy, but may extend to the prices of basic resources.


Oil prices and food resources 2022



Source --> https://global-macro-monitor.com/2022/03/09/real-oil-prices-are-36-below/


Do not forget about the future repercussions, as replacing gas can lead to the use of coal, and thus increase heat emissions, which will increase the extremes of the atmosphere.

We do not forget that the unprecedented heat wave and drought in Canada during 2021 led to the damage of many crops and thus will affect the prices of agricultural products.

Last time i went to the pump for diesel (wich i need to drive to work, i use about 6 ltrs/day just for driving to/from work), i payed > 2€/ltr. That's 12€/day just in diesel, just for going to work.

Gas and electricity are also booming, every couple of weeks it looks like the prices go up by x%.

The economic impact of the wars for the majority of the population is widespread impoverishment, but we have to keep in mind that the problem of inflation and rising energy prices was pre-war, only now it has been exacerbated. Moreover, as the economy is globally connected, even if we do not live in either of the two countries in conflict, we are affected. This will surely continue but at some point it will have to stop due to the rebound effect of low demand in the face of high prices, at least in some sectors. Hopefully the war will be over sometime soon as well.

In my particular case, some months ago I was promoted at work with a considerable pay raise, so I have not been affected so much by inflation, but as prices have been rising for the past months I do not feel as rich as when I was promoted but much better than people who live paycheck to paycheck.

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We are in a nightmare scenario right now with as bad as it’s gotten with inflation, natural gas, electricity, and gas at the pump.  I have to imagine the economic impact this will make will be huge. My natural gas bill this month was $275. My place isn’t even that big. My electric bill will probably be $150-200 and I don’t use much electricity at all. I used to walk out of the grocery store each week having paid about $125, and now it’s closer to $175.  Luckily I have a gas efficient car and that’s not a big expenditure.  This shit is all adding up and out of hand.

 What do you guys think the economic impact will be? Are your rates up super high as well?