- A sharp rise in natural gas prices since August has put upward pressure on a host of commodities, including coal, electricity, and oil while squeezing margins for industrial users.
- Given existing supply bottlenecks in shipping and computer chips, the run-up in commodity prices has fed renewed concerns about inflation and a potential negative growth impulse from constrained industrial output and higher spending on heating bills.
- Though we argue it is needed to address climate change and will motivate use of additional non-hydrocarbon energy sources, carbon pricing is a potential source of additional upside pricing pressure for commodities.
For further details see:
Energy Volatility Shows Power Of Commodities To Influence Inflation