Added to my oil and commodity positions today. Looks like Joe Biden and NATO ready to implode the world economy in short order. Oil is at $122 a barrel. However, once Russian oil is removed even a portion of it, it should spike oil upwards. Russia has also, threatened to cut natural gas supplies to Europe. Airlines getting beaten down as well. Hyperinflation is upon us. You better believe it.
True, but high oil prices also have a shutdown effect. If gas is $10, leisure travel will be curtailed and people will stay home a great deal more. Funds that were being spent on nights out will now go to groceries. Those supply issues will be less so if people aren't buying as many things.
Power plants in the US generating electricity in the US also, run on oil. If electricity prices go up, those free charging stations, would start charging fees to electric cars wanting a charge.
Fortunately, only a small amount of power plants use oil. Most of the generation is via natural gas. Surprised that only 2.3% is solar. For all the tax credits and govt money (Solyndra) funneled into green energy, the payoff is quite small. For green, Nuclear seems to make the most sense if hydroelectric is not an option. Natural gas (40.3%) Nuclear (19.7%) Coal (19.3%) Wind (8.4%) Hydro (7.3%) Solar (2.3%) Biomass (1.4%) Petroleum (0.4%)
Roughly 70% of petroleum-fired electric generating capacity that still exists today was constructed prior to 1980. Utility-scale generators that reported petroleum as their primary fuel comprised only 3% of total electric generating capacity at the end of 2016 and produced less than 1% of total electricity generation during 2016. Power plants that burn petroleum liquids (such as distillate or residual fuel oils) are generally used for short periods during times of peak electricity demand. Otherwise, petroleum-fired power plants operate mostly at low capacity factors because of the high price of petroleum relative to other fuels, air pollution restrictions, and lower efficiencies of their aging generating technology. Most oil-fired generators are either turbines or internal combustion engines used to supply power only at times of peak electric power demand or when natural gas prices rise due to local natural gas demand.
That's exactly why the fed has a greater chance of not raising rates. Also a collapsing markets will keep consumer spending lower, consumers will start to fear everything about geopolitical events and that too will ease inflation.