Energy prices are surging, and the economy is already feeling the pinch of higher fuel costs though it is far from stalling out.
There is an unusual coincidence of much higher oil, natural gas and coal prices, combined with other rising commodities and supply chain disruptions. That perfect storm of shortages and higher prices begs the question of whether the economy could go into a serious tailspin or even a recession.
Economists say, for now, the jump in prices is not the type of oil shock that will turn U.S. growth negative, but there will be economic consequences of higher energy costs, particularly in places like Europe where natural gas prices have skyrocketed.
“Periods of trending oil prices tend not to be a problem,” JPMorgan chief economist Bruce Kasman said. “The periods of spiking oil prices tend to be what gets you into trouble. They tend to be largely supply driven, and they tend to have disruptive elements that are more broad in terms of their potential drags on growth.”
“We do have a rise in energy that will be a drag on fourth quarter growth,” he added. “It’s not at a point where we’re warning about recession, but it’s at the point where you have to worry about it hurting growth in a material way.”
American consumers have already been paying up for gasoline, and heating and electricity costs could rise more this winter. Oil prices are up more than 65% this year so far, while natural gas prices have jumped more than 112% since January.
“We’re looking at GDP growth in the 4% to 6% range … We would have to see massive doubling and tripling of oil prices for it to have such a bad effect that we go … to negative growth,” said Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle.
Since last October, gasoline prices have risen about $1.10 per gallon, and are now at $3.27 per gallon of unleaded, according to AAA. Oil prices were depressed and even turned negative when the pandemic shut down the economy in 2020. Now, forecasts for $100 oil are getting more common, as West Texas Intermediate oil futures trade above $80 per barrel for the first time since 2014.
“What’s different about this is normally it’s oil that leads an energy crisis, but in this case it’s the tail that’s being wagged by natural gas, coal and renewables,” said Daniel Yergin, vice chairman of IHS Markit. “Oil is filling in to make up for the fact that [liquified natural gas] is maxed out and wind in Europe has been a lot lower than normal.”
Trouble brewing in energy markets
Yergin said oil will likely remain under pressure, and within several months about 600,000 to 800,000 barrels a day could be used as a substitute for natural gas in Europe and Asia, where supplies are short. Oil can be substituted for electricity generation and in some manufacturing.
Citigroup forecasts a winter price shock that could see natural gas prices in Europe average over $30 per one million British thermal unit in the fourth quarter and over $32 in Asia. But Citi energy analysts also say if there is a very cold winter that could spike as high as $100 mmBtus, the equivalent of about a $580 barrel of oil. By comparison, U.S. natural gas futures are currently trading at $5.25 per mmBtu.
Coal prices have also been rising and supplies are short, creating a power supply crunch in China. The country burns coal to generate electricity, but the inventory at its power plants faced a 10-year low in August. That has also increased the demand for natural gas.
“While China unambiguously needs as much coal as it can get its hands on to avert a [fourth-quarter] slowdown due to the tyranny of rolling power shortages, geopolitical tensions with Australia have waylaid the most convenient source of high-calorific coal from Down Under,” Vishnu Varathan, head of economics and strategy for Asia and Oceania treasury department at Mizuho, said in a recent note.
Economists say the rise in energy prices would have to be sharper and much more prolonged to cause a recession.
Bernstein energy analysts looked at past periods where prices rose sharply, and found that recessions followed periods where energy costs were at 7% of global GDP, as they reached in October.
They note the probability of recession rises when the energy costs stay above that level for a period, greater than a year.
“While the recent spike in energy costs may prove transient, a protracted period of energy costs [greater than a year] or further rise in oil to over US$100/bbl could trigger a slowdown in global economic growth as disposable income gets squeezed,” Bernstein analysts wrote.
Even though the share of energy costs is the highest in nearly a decade, on an annual basis it is still 5.2% of GDP so far in 2021, and that is not yet a dangerous level, they added.
“Annual energy costs as a percentage of GDP are above the 30-year average of 4.4%, but below that of 1979 or 2008 when annual energy costs reached over 7% of GDP,” the Bernstein analysts wrote. “If energy prices rises prove to be transient, then the risk of an energy induced recession remains low.”
U.S. as a producer
Changes in the U.S. energy industry over the past two decades have provided some insulation from some of the current global energy crisis.
Mark Zandi, chief economist at Moody’s Analytics, said the hit from an energy price surge would not be all negative, since the U.S. is now a large energy producer. The U.S. produces about 11.3 million barrels a day, and exports oil and refined products.
Even with its huge production, the U.S. remains an importer of crude, bringing in an average 3.8 million barrels a day over four weeks, according to the latest Energy Information Administration weekly data.
The U.S. is providing natural gas to Europe and Asia, in the form of LNG exports, but U.S. gas prices are tied more to the domestic market and have been elevated because U.S. supplies remain lower than normal for this time of year.
Zandi said the dominance of the U.S. energy industry also has a positive impact on energy-producing parts of the economy as prices rise.
“That doesn’t mean that higher energy prices under certain scenarios wouldn’t cause a recession,” he said. “It’s just much less likely, and it would take much higher prices than it has in the past.”
Zandi said every penny increase in the cost of a gallon of gas costs U.S. consumers $1 billion. When it rises $1, as it has in the last year, that’s about $100 billion.
Another $1 jump would be harmful.
“That’s $100 billion, just a half percent of GDP. It would do damage. It would ding the economy, but I don’t think it would derail it,” he said. “If it went to $5.25, that’s $200 billion. That’s a percent of GDP. If energy prices are rising like that it’s likely other prices are rising.”
The immediate impact of higher energy costs is higher inflation, which creates a drag on consumer spending.
Kasman said the increase in energy prices, as of last week, would add about 2.5% to the consumer price index in the fourth quarter, if prices remain at that level. That could translate to a drag of a half percentage point or more on GDP, he noted.
“That is not small, but it’s not a recession,” he said. Kasman said he expects a pretty strong global economy next year, but the higher energy costs do raise concerns there could be an even big enough drag on purchasing power and that could chip away at growth.
Kasman said the impacts gets worse, the higher prices go. JPMorgan economists ran an analysis where they projected another 50% jump in energy prices.
“In this scenario, in which crude oil prices move quickly above US$100/bbl, the shock to US incomes is very large — as CPI inflation is pushed up by 10%-pts annualized — nearly twice the impact we estimate for the Euro area,” they said in a note. “While this scenario does not appear likely, it is important to recognize the threat posed by the combination of supply shocks now buffeting the global economy.”
JPMorgan forecasts fourth-quarter gross domestic product growth of 3.5%, and now expects the third quarter grew at a 4% pace, down from an earlier forecast of 8%. The firm expects average growth of 3.5% next year. They also forecast CPI gains to average more than 4% during the second half of the year.
CNBC’s Michael Bloom and Saheli Roy Choudhury contributed to this report.
For serious fleet buyers, safety isn’t a “nice-to-have,” it’s an absolute must – and Kia’s new PV5 electric van meets that need with a positively stellar, five-star safety rating on the tough European NCAP safety test.
The new “do-it-all” Kia PV5 showed strong performance across a number of key safety categories, including Occupant Protection, Safety Assist/Crash Avoidance, and Post-Crash Safety. The PV5’s robust suite of standard ADAS technologies that includes AEB, Lane Support System, and Speed Assistance System also helped the new electric work van to deliver top marks in the NCAP’s “real world” test scenarios.
The Euro NCAP tests highlighted the strong performance of a number of the PV5’s ADAS features, specifically calling out the following:
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Demonstrated strong responsiveness in vehicle-to-vehicle scenarios
Provides additional protection for pedestrians behind the vehicle
Avoided collisions in most pedestrian and cyclist test cases
The Kia PV5 slots into familiar territory for US buyers, landing roughly in the same size class as the Ford Transit Connect or Ram ProMaster City, with ~180 cubic feet of interior cargo space available, which is plenty to make it attractive for last-mile delivery and trade work in tight urban markets.
Globally, the PV5 is offered with a number of battery options, including a smaller 43.3 kWh Lithium-Iron-Phosphate (LFP) pack, as well as larger Nickel-Cobalt-Manganese (NCM) packs at 51.5 kWh and 71.2 kWh. The longest-range versions are good for about 250 miles of estimated range – more than enough for Kia to make a case for it as a practical, city-focused alternative to much larger (and pricier) electric vans.
Larger vans, by the way, that may not have that 5 star Euro NCAP rating.
Kia PV5
SOURCE | IMAGES: Kia; photo by Scooter Doll.
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Alphabet-owned Waymo has suspended its driverless ride-hail service in the San Francisco Bay Area after blackouts plagued the city Saturday afternoon.
“We have temporarily suspended our ride-hailing services in the San Francisco Bay Area due to the widespread power outage,” a Waymo spokesperson tells CNBC. “Our teams are working diligently and in close coordination with city officials, and we are hopeful to bring our services back online soon. We appreciate your patience and will provide further updates as soon as they are available.”
Waymo notice of service outage in San Francisco.
Source: Waymo
As power outages spread yesterday, videos shared on social media appeared to show multiple Waymo vehicles stalled in traffic in different parts of the city.
San Francisco resident Matt Schoolfield said he saw at least three Waymo autonomous vehicles stopped in traffic Saturday around 9:45 p.m. local time, including one he photographed on Turk Boulevard near Parker Avenue.
“They were just stopping in the middle of the street,” Schoolfield said.
A Waymo vehicle stuck between Parker and Beaumont, on the north side of Turk Boulevard in San Francisco.
Credit: Matt Schoolfield
The power outages began around 1:09 p.m. Saturday and peaked roughly two hours later, affecting about 130,000 customers, according to Pacific Gas and Electric. As of Sunday morning, about 21,000 customers remained without power, mainly in the Presidio, the Richmond District, Golden Gate Park and parts of downtown San Francisco.
PG&E said the outage was caused by a fire at a substation that resulted in “significant and extensive” damage, and said it could not yet provide a precise timeline for full restoration.
San Francisco Mayor Daniel Lurie said in a 9 p.m. update on X that police officers, fire crews, parking control officers and city ambassadors were deployed across affected neighborhoods as transit service gradually resumed. “Waymo has also paused service,” Lurie said.
Amid the disruption, Tesla CEO Elon Muskposted on X: “Tesla Robotaxis were unaffected by the SF power outage.”
Unlike Waymo, Tesla does not operate a driverless robotaxi service in San Francisco.
Tesla’s local ride-hailing service uses vehicles equipped with “FSD (Supervised),” a premium driver assistance system. The service requires a human driver behind the wheel at all times.
According to state regulators — including the California Department of Motor Vehicles and California Public Utilities Commission — Tesla has not obtained permits to conduct driverless testing or services in the state without human safety supervisors behind the wheel, ready to steer or brake at any time.
Tesla is vying to become a robotaxi titan, but does not yet operate commercial, driverless services. Tesla’s Robotaxi app allows users to hail a ride; however, its vehicles currently have human safety supervisors or drivers on board, even in states where the company has obtained permits for driverless operations.
Waymo, which leads the nascent industry in the West, is Tesla’s chief competitor in AVs, along with Chinese players like Baidu-owned Apollo Go.
The outage-related disruptions in San Francisco come as robotaxi services are becoming more common in other major U.S. cities. Waymo is among a small number of companies operating fully driverless ride-hailing services for the public, even as unease about autonomous vehicles remains high.
A survey by the American Automobile Association earlier this year found that about two-thirds of U.S. drivers said they were fearful of autonomous vehicles.
The Waymo pause in San Francisco indicates cities are not yet ready for highly automated vehicles to inundate their streets, said Bryan Reimer, a research scientist at the MIT Center for Transportation and co-author of “How to Make AI Useful.”
“Something in the design and development of this technology was missed that clearly illustrates it was not the robust solution many would like to believe it is,” he said.
Reimer noted that power outages are entirely predictable. “Not for eternity, but in the foreseeable future, we will need to mix human and machine intelligence, and have human backup systems in place around highly automated systems, including robotaxis,” he said.
State and city regulators will need to consider what the maximum penetration of highly automated vehicles should be in their region, Reimer added, and AV developers should be held responsible for “chaos gridlock,” just as human drivers would be held responsible for how they drive during a blackout.
Waymo did not say when its service would resume and did not specify whether collisions involving its vehicles had occurred during the blackout.
Tesla and the National Highway Traffic Safety Administration did not immediately respond to requests for comment.
This is a developing story. Please check back for updates.
— CNBC’s Riya Bhattacharjee contributed reporting.
The Dahon K-Feather is one of those electric bikes that makes a lot more sense the longer you ride it. On paper, it looks rather low-power and low-capacity compared to the spec sheets for most e-bikes. In practice, especially when used exactly as intended, it turns out to be a remarkably well-executed urban commuter that still feels refreshingly different years after its release.
Launched earlier this year by Dahon, a brand best known for decades of folding bike experience, the K-Feather was never meant to compete with high-power folding e-bikes loaded with throttles, suspension, and giant batteries.
Instead, it aims for something far simpler: a super lightweight folding bike that just happens to have electric assist.
A lightweight e-bike, even by light e-bike standards
At around 26 lb (11.8 kg), the K-Feather is shockingly light for an electric bike, even by today’s standards. Pick it up and it barely registers as an e-bike at all. That’s largely thanks to its extremely minimalist design, highlighted by the cleverly hidden battery integrated into the seatpost.
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The 24V 5Ah battery offers roughly 120 Wh of capacity, which is undeniably small, but it also avoids the bulky look and awkward weight distribution that many early e-bikes suffered from.
The result is a bike that feels balanced, easy to carry, and genuinely pleasant to live with in an urban environment. Folding it up is quick and intuitive, and carrying it up stairs or onto public transport doesn’t feel like a chore. For apartment dwellers, train commuters, or anyone combining cycling with other forms of transportation, this matters a lot.
I’m not sure how else to say this without beating a dead horse, but it is just incredibly lightweight. When you pick it up, your brain just sort of short-circuits as it fails to compute that this is still an electric bike.
Simple, subtle electric assist
Power comes from a 250W rear hub motor that provides pedal assist only. There’s no throttle, no complex display, and no attempt to turn the K-Feather into something it isn’t. The assist tops out around 15.5 mph (25 km/h), aligning more with European-style pedelec limits than US Class 2 or Class 3 expectations.
For those accustomed to American-style electric bikes, that may sound quite slow. And if you’re trying to keep up with traffic on the shoulder of a busy road, it is slow. But this e-bike is more designed for bike lane cruising, where 15 mph means you’re easily keeping up with, or passing, most pedal bike riders.
The assist itself is quiet and unobtrusive. It doesn’t leap forward when you start pedaling, and it doesn’t overpower the ride. Instead, it feels like a gentle push that smooths out stop-and-go city riding and takes the edge off short climbs and headwinds. You still feel like you’re riding a bike, just a slightly stronger version of yourself.
The torque sensor definitely does its job, coming on quickly and effectively without being lurchy, though it’s hard for a 250W motor to feel lurchy anyway. But with an effective torque sensor instead of a laggy pedal assist sensor, the minimal assist still feels nice and natural, as if you’re simply always pedaling with a tailwind.
That riding feel is a big part of the K-Feather’s charm. It doesn’t try to impress you with acceleration or brute force. It simply makes urban cycling easier, calmer, and more approachable. It’s not a powerhouse, but rather a sensible commuter.
Where the limitations show up
There’s no getting around the fact that the K-Feather’s small battery and modest motor define its limits. Range is typically quoted at around 15 to 20 miles (25 to 40 km), and that’s realistic if you’re riding on relatively flat terrain and contributing a reasonable amount of pedal effort. Start pushing hills hard or riding aggressively, and that number will drop.
There aren’t multiple pedal assist levels, so it’s not like you can drop it into lower pedal assist power to save battery. Instead, range largely comes down to your weight, your riding, speed, and how hilly your terrain proves to be.
Similarly, steep climbs will quickly reveal the bike’s low power output. This is not a hill crusher, and it’s not pretending to be one. The single-speed drivetrain reinforces that reality, keeping things simple and low maintenance but limiting flexibility when terrain gets demanding.
The V-brakes look old-school, sure. But I wouldn’t actually ding them here because they seem to work great. I had rim brakes for a long, long time. And while I enjoy the stopping power and low maintenance of hydraulic disc brakes, I can’t ignore the fact that when I yank on these stoppers, I quickly find myself stationary. So yeah, pooh-pooh them all you want for being older tech, but they work.
And lastly, I do wish the tail light and headlight were powered by the main e-bike battery. Instead, they have their own dedicated rechargeable batteries. It works, but it’s one more thing to remember to charge every now and again.
For riders coming from American-style, high-powered e-bikes, these constraints might feel significant. But context matters here, and that’s the thing to keep in mind for anyone considering an ultra-lightweight e-bike like this. The K-Feather isn’t trying to replace a car or handle long suburban commutes. It’s designed for short urban trips, last-mile riding, and compact living situations, and in that role, its limitations feel more like trade-offs than flaws.
In its element: city commuting
The key takeaway for me is that the K-Feather works best as a runabout in a dense city environment, which is where it makes perfect sense. Short trips between neighborhoods, errands, commuting a few miles to work, or riding to a train station are exactly what it excels at. Its light weight makes it easy to carry inside rather than locking up outside, and its discreet appearance doesn’t scream “expensive e-bike.”
In fact, at around US $1,299 depending on current pricing and sales, that’s a pretty darn good price for an ultra-lightweight e-bike. We’re used to seeing e-bikes in this price range fetch higher figures in the $3,000 to $4,000 range (and sometimes even much more) from exotic frame materials and obscure drivetrains. But the K-Feather just uses clever engineering that tracks with Dahon’s decades of design legacy to create something light yet stiff, and without breaking the bank.
The small wheels and compact geometry make it nimble in traffic, and the assist smooths out frequent starts and stops at intersections. You arrive less sweaty and less fatigued, but still feel like you actually rode a bike rather than being carried by a motor.
This is also a bike that appeals to riders who want electric help without fully committing to the idea of an e-bike. It’s unintimidating, visually understated, and mechanically simple. For many people, that’s a feature, not a drawback.
Final thoughts
The Dahon K-Feather isn’t for everyone, and it certainly isn’t trying to be. If you want high speed, long range, or hill-dominating power, this is not the bike for you. I’d recommend that you look elsewhere (and be prepared to lift several more kilos).
But if you want a genuinely lightweight folding e-bike that integrates electric assist in a subtle, elegant way, it still holds up remarkably well. And folds up remarkably well, too.
Used in its intended environment as a city-focused commuter and last-mile bike, the K-Feather works exactly as promised. It’s simple, refined, and quietly effective, and that’s a combination that remains surprisingly rare in the e-bike world.
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