A global shortage of natural-gas supplies continued to convulse markets. Prices have soared in recent weeks, especially in Europe, following a convergence of adverse factors, such as booming demand in Asia coinciding with tight stocks of liquefied natural gas. In Europe some governments are stepping in to alleviate the pressure on spiralling household bills. The International Energy Agency pointed out that Russia’s gas exports to Europe are below their level of 2019, and urged it to “do more to increase gas availability”.
A fowl situation
One of the many knock-on effects of the turmoil in gas markets was a shortage of carbon dioxide as an industrial gas in Britain. A big producer of carbon dioxide had to close its factories because of soaring natural-gas prices, which in turn led to warnings from the chicken industry about a possible paucity of poultry. Carbon dioxide is used to stun hens for slaughter.
Evergrande, one of China’s biggest property developers, said it had “resolved” the payment of interest on a domestic bond amid a liquidity crisis. The highly indebted company has warned of a default and has reportedly missed interest payments to bank creditors. Investors are watching nervously. The central bank has been pumping liquidity into the financial system to shore up confidence.
The official statement from the Federal Reserve’s meeting this week prepared markets for the strong possibility that it will start to taper its pandemic-programme asset purchases in November. The central bank also hinted at an interest rate rise next year.
The OECD raised its forecast for inflation in the G20 countries, in part because of higher shipping costs and energy prices. The average annual inflation rate for the group is now expected to be 3.7% this year and 3.9% in 2022. Battling inflation that is nearing 10%, Brazil’s central bank raised its main interest rate for the fifth consecutive month.
America’s House of Representatives passed a bill that would extend the federal debt ceiling until December next year in order to avoid a government shutdown on October 1st this year. Democrats supported the bill and Republicans opposed it. The Senate will now have its say, amid warnings that markets will run out of patience the longer a resolution is delayed.
Douyin, a Chinese video-sharing app that has an international version called TikTok, said children under 14 in China would be limited to using it for 40 minutes a day. It is the latest move in China to tighten controls over children’s online behaviour.
Shell struck an agreement to sell its energy assets in America’s Permian Basin to ConocoPhillips for $9.5bn. The Anglo-Dutch energy giant is under pressure to quicken the pace of carbon-emission cuts. In May a Dutch court ordered the company to hit a specific carbon-reduction target by 2030 (it is appealing against the…
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