Global energy prices are continuing their upward trend. While natural gas prices are breaking records in the United States, the ground is trembling with the fury of the people in Europe. Increasing energy prices have become the world’s main concern. Today, we’ll take a quick look at the developments unfolding on this matter.
Will petrol prices reach 100 dollars?
One of the most significant commodities on this earth is fuel. Used not only for energy production but many other fields, the prices of fuel, which is a critical raw material, have always been among the data closely monitored by the entire world. Today, everywhere you turn, people are discussing it. Not a few days ago, the price of petrol per barrel hit the 80-dollar mark. Furthermore, Goldman Sachs, in a report, revised its year-end petrol price outlook to 90 dollars from 80.
However, this is not all that developments portray. I closely follow the Foreign Ministry’s Energy Advisor Caner Can, who analyzes developments in a very technical manner, so that I may be kept up to speed on everything happening in the energy sector. In the past month of June, he made a prediction, saying, “My personal opinion is that at the beginning of 2022’s second quarter, petrol prices will be over $100 per barrel.” Caner Can further pointed out that fuel firms have not been making the necessary investments when it comes to this subject.
Natural gas prices have surged in the US and Europe
Another aspect that the hike in global energy prices impacts is, no doubt, the increase in natural gas prices. U.S. natural gas futures rose to a seven-year high, since February 2014, this week. The reason being limited resources and the serious concerns of high global demand.
Similarly, natural gas prices in Europe are enough to scare one’s socks off. Supply shortages in Europe and the inadequacy of other resources for electricity generation are pushing prices up. If this winter’s weather conditions are harsher than last year’s, it is very likely that a natural gas crisis will come to pass.
How will Turkey be affected?
Turkey is a gas-importing country. Even though the share of renewable energy resources has distinctly surged within the total pie of electric production, the demand for natural gas in residences, as well as the industry, is increasing every passing day. Especially in the post-pandemic period, the increase in industrial production and the decrease in electricity production in dams due to drought will increase natural gas demand compared to previous years, as natural gas-powered plants will be more active.
This means that increasing petrol and gas prices will only lead costs in every other field to also bounce. In other words, the possibility that the increase in global energy prices will exert inflationary pressure on the domestic cost channel will only be heightened.