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Brexit, the controversial election of Donald Trump, the war in Syria… You may think it is all far removed. Serious and important, but with no direct consequences for your life. Think again! All these events do in fact have a direct impact on the price of commodities, so you may see strange fluctuations in your energy bill.
Most homes are warmed using one of two fossil fuels: natural gas and heating oil. The exploitation of gas and oil is concentrated around several countries in the Middle East, although there are large gas reserves in North America, Europe and Asia. A conflict at one of these locations is guaranteed to impact the price of commodities.
Government policy can also have a (direct) impact on the price of commodities. Take for example the decision whether or not to ‘frack’, a controversial method to mine previously inaccessible gas reserves. Since fracking is permitted at various locations, the gas prices have dropped considerably. There is simply more gas on the market. While oil has become slightly more expensive, gas is currently cheap.
However, those who trade in commodities – as tradable natural resources are known on the stock market – do not wait for the implementation of the policy to steer their investment strategy. We also saw that the election of a new leader – like Donald Trump in the United States – has an immediate effect on the stock markets and commodity prices. On the one hand, investors expect America to tap into more oil and gas, on the other, there is a fear that Trump may create international conflicts, which in turn will drive prices up again.
As you can see: what happens on the international stage, does in fact influence your comfortable life.
If there is one thing we can learn from that for the future, then perhaps it is that it is important to live independently of fossil fuels and scarce commodities. Although gas is currently cheap, it is impossible to predict how expensive this fuel will be next year – never mind over twenty years. By installing a gas boiler now, you make yourself dependent on the price of gas.
Fortunately, due to the ecological turnaround, we can largely free ourselves from fossil fuels and fully focus on sustainable energy. Renewable energy is not only better for the climate, it can also help you to keep your energy bill under control. For example, combine solar panels, a heating pump and an underfloor heating system in your house and save a significant percentage on your energy bill.
