Global inflation is like a tiger! NO, fiercer than the tiger!

On January 13, U.
S.
natural gas futures suddenly soared 14%.

Year-to-date, U.
S
.
natural gas is up more than 30 percent, making its strongest start to the new year in more than 30 years.

The surge in U.
S.
natural gas futures was triggered by weather forecasts that show that the weather in the main populated areas of the east coast of the United States will become colder, in addition, a winter storm is expected to hit the southern region of the United States in the near future
.
Winter storms and cold snaps can lead to a surge in demand for gas-fired heating and a surge in natural gas prices
.

However, the cold wave hitting the United States is only a short-term factor that has led to the rise in natural gas prices, and the core of the US natural gas increase of more than 30% this year is the correction of the US dollar exchange rate, Germany's suspension of the opening approval of the "Nord Stream 2" project, and the historically low inventory of the European natural gas market that has greatly increased the import of liquefied natural gas from the United States
.

Global oil and gas price volatility is mutually reinforcing
.
Natural gas prices skyrocketed, and oil prices rose sharply with the wind
.
So far, benchmark Brent crude has reached $83.
70/b, rebounding
from previous lows below $70/b.
Since the beginning of this year, international crude oil prices have been rising, and the price of crude oil in London has also exceeded 80 US dollars / barrel
.

The rise in international oil prices is closely related
to the restriction of oil production in oil-producing countries.
It's not that oil-producing countries don't want to raise production, but that the decline in world investment in oil extraction over the past three years has led to a decline
in oil production capacity.
Many OPEC members, such as Angola and Malaysia, have seen a decline
in oil production due to reduced investment spending.
Even senior OPEC officials bluntly said that we do not want oil prices to rise to $100 per barrel, but our production capacity is limited
.

Moreover, since the beginning of December last year, as the economies of various countries represented by the United States began to recover during the post-COVID period, the world's demand for energy increased, and oil prices gradually stopped falling and rose
rapidly.

At the same time, socio-economic turmoil in some oil-producing countries due to high geopolitics and inflation is also a sudden factor in the price of crude oil, such as the volatility
of oil prices caused by the riots in Kazakhstan.
Kazakhstan is a very important link in the global supply chain and has become a very important transportation hub
in Central Asia in recent years.
In addition, it is an export-oriented economy and occupies a relatively important position in world trade, especially in energy and some key strategic resources, Kazakhstan is the second largest non-OPEC crude oil producer in the OPEC+ group
.
According to the International Energy Agency, the country averaged about 1.
7 million barrels
per day of oil in November.
Its economic growth is also highly dependent on the export of crude oil, natural gas and related products, accounting for 73%
of exports.
After the unrest, Kazakhstan's production activities still face some uncertainty
.

The "2022 Bank of China Personal Global Asset Allocation White Paper" released by the Bank of China Investment Strategy Research Center pointed out that international crude oil prices will fluctuate at a high level this year, because the probability of a large increase in production on the supply side is not high, and the demand side is likely to remain stable
.

JPMorgan's Jan.
12 forecast is even bolder: OPEC's spare capacity is expected to decrease this year, creating a risk premium that pushes up international oil prices
.
Oil prices will rise to $125/b this year and $150/b
in 2023.
"We are seeing a growing recognition of underinvestment on the global supply side
.
"

JPMorgan also said it is in a critical period and production in other oil producers is faltering
.
The combination of underinvestment by OPEC+ producers and rising oil demand after the pandemic could lead to a potential energy crisis
.

Chris O'Shea, chief executive of Centrica, the parent company of British Gas and Britain's largest energy supplier, recently said that soaring energy prices, which threaten the living standards of millions of people, could last up to two years
.

Oil as the blood of the industrial economy and the most basic energy for economic development, if the international oil price rises sharply or remains high and volatile, it means that it is difficult for the inflation rate of various countries to be lowered this year, just like the United States accelerating on the road to high inflation, the consumer price index (CPI) has broken five or six, and even the inflation rate in December 2021 is 7%, hitting a new high
in 39 years.
As the world economy gradually recovers, the sequelae of huge monetary and fiscal stimulus in various countries around the world during the epidemic are highlighted this year, and inflation is likely to become the biggest macro risk
in the world this year.