Energy became much more expensive in 2021ExBulletin

Mary-Louise Kelly, Host:

Compared to this time of last year, we are now paying a lot to use all kinds of energy, whether it’s car gas or home heating fuel. It’s part of the global trend.

And NPR’s Camila Domonoske is here to explain why. Hey, Camilla.

CAMILA DOMONOSKE, Byline: Hello Mary-Louise.

Kelly: So I was impressed-that is, this affects all of us. As you know, crude oil, price per barrel-may be hard to move. But your heating costs are right there, staring at you from the kitchen table. How is it going?

Domonosuke: Yeah. As you said, overall prices are rising. It’s not the worst scenario that people had the courage just a few months ago, and it’s not as bad as the crisis Europe sees, but yeah, compared to last year, when looking at gas prices, it’s about 40%. It is rising. Natural gas prices have risen by more than 60%. And natural gas, I need to be careful-it’s used for heating in about half of the country. But more and more people are supplying it to their electricity bills. Oh yeah, this is definitely something people can feel.

Kelly: And why? Why is the price so high?

DOMONOSKE: Much of it is the same story that has evolved in different parts of the economy over the last two years. During the early days of the pandemic, demand disappeared really quickly. People stopped driving and flying. The factory was closed and did not require electricity. As a result, supplies have decreased. But now that demand is back, supply is struggling to keep up.

In fact, especially when looking at oil prices, they are so closely tracked to the pandemic headlines that they can basically be used as an indicator of public opinion. When people are optimistic about the end of the pandemic, oil prices will rise. Then you will receive Delta or Omicron news and they will be back.

There are several other factors. Like the oil industry, investors are urging producers to reduce production and keep prices high in order to curb supply and make a profit. It’s really different from the era of drills, babies and drills. It also works.

Kelly: Now let’s talk about what this means for all of us. As I said, all of us in general don’t really feel like winter because it’s winter, but we’re staring at this heating cost for our table DC (laughs). In that respect, it will hold up in January. But what about home heating costs?

Domonosuke: Yeah. Therefore, these costs are also rising. And it doesn’t really matter what your fuel source is. They are all to some extent. But when it comes to fuel heating, talking about such weather is not just a small story. So here in Virginia it was 65 degrees this week. It affects the price. It reduces demand. And the price of natural gas, which had skyrocketed just a few months ago, has actually fallen recently due to the warm climate in many countries. But it can still change. In the event of a cold wave, prices will move in the opposite direction. Then the invoice will be restored again.

Kelly: And what about gas prices? What are you looking at

Domonosuke: Yeah. So it’s down a bit from the recent highs, but still up about 40% from last year’s highs. As for what will happen next, the predictions are on the entire map, ranging from a quick drop to a sharp rise. So much of this goes back to the pandemic and all the uncertainties around it. Energy prices are constantly changing and are now more true than ever.

Kelly: Thank you, Camila Domonosuke of NPR. Happy new year.

DOMONOSKE: Thank you. You too, Mary Louise.

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