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Energy prices have plummeted due to concerns over the banking crisis, but this is likely only a short-term dip, according to an energy expert.
Unfortunately, this means customers who have been facing soaring bills won't see much relief.
The Energy Information Administration (EIA) projected that the price of electricity, specifically in the residential sector, will increase in 2023 and in 2024. In 2022, the average cost of electricity in the U.S. was 15.12 cents per kilowatt-hour. That's projected to rise to 15.63 and 15.66 cents over the next two years, according to EIA data.
Workers with Southern California Edison replace a transformer on Holt Street in Santa Ana, Calif., Sept. 10, 2021. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images / Getty Images)
"I'm afraid we're going to have to get used to a new era of higher energy prices across the board," Price Futures Group Senior Analyst Phil Flynn told FOX Business. Flynn is also a FOX Business contributor.
FOOD, RENT AND ENERGY PRICES REMAIN HIGH IN FEBRUARY INFLATION BREAKDOWN
Flynn explained that energy prices are plunging on concerns over the banking crisis, which unfolded two weeks ago when Silicon Valley Bank failed, and not because demand for oil supplies has suddenly dried up.
"Supplies versus demand are about as tight as they have ever been," he added.
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A Pacific Gas & Electric worker walks in front of a truck in San Francisco. (AP Photo/Jeff Chiu / AP Newsroom)
Global energy consumption has rebounded from the start of the COVID-19 pandemic, and supply was barely keeping pace with demand before the war in Ukraine further reduced stockpiles. As a result, energy prices remain elevated, squeezing already tight household budgets even further.
The National Energy Assistance Directors’ Association (NEADA) announced in January it had the highest total number of Low Income Home Energy Assistance Program (LIHEAP) applications this winter since 2011 "as families struggle with paying some of their biggest home energy bills in more than a decade."
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During winter, the number of households receiving energy assistance jumped by an estimated 1.3 million. This doesn't "even account for possible increases in applications this summer to help families pay for air conditioning as they deal with rising temperatures due to climate change," the NEADA added.
If the banking situation stabilizes, it will actually make matters worse with respect to oil supplies, according to Flynn.
An electric meter outside a home. (iStock / iStock)
"It will actually be more bullish for energy prices because the banks are going to be less likely to lend money," he said, adding that oil companies that are uncertain about the economy might not follow through on making investments in oil.
"On top of that, you have the current administration that makes it difficult to get a project off the ground anyway."
UNDERLYING ENERGY MARKET CONDITIONS COULD SIGNAL PAIN FOR CONSUMERS THIS WINTER AND BEYOND
All those factors would contribute to a "massive underinvestment" in future supplies, which, in turn, could cause higher energy prices "for decades maybe to come," he added.
"At the end of the day, demand is on an upward trend and production is not keeping up, and it's going to have a difficult time keeping up because the investment dollars just aren't there," he said.
A gas stove lets off a blue flame inside a kitchen in Barcelona. (Davide Bonaldo/SOPA Images/LightRocket via Getty Image / Getty Images)
If we want low energy prices at this point, you have to "be rooting for a recession or a major economic slowdown," Flynn noted.
However, given that the supply and demand balance is so tight, "if the economy continues to grow, prices are going to have to go up to move demand and encourage future investment," according to Flynn.
It's important to keep in mind, though, that bills are contingent on electricity usage as well as the price of energy.
For instance, Consolidated Edison Inc., or ConEd, which provides energy to roughly 10 million people in New York City and Westchester County, has been advising customers to be "particularly mindful of managing their usage at a time when energy prices are high across the country." close video US energy needs to be ‘affordable, reliable and cleaner’: Chevron CEO Mike Wirth
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Luckily, a warmer winter helped to depress energy usage, meaning customers didn't see the big spike in bills that happened in January 2022, a spokesperson for ConEd told FOX Business.
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Still, the company has been offering its customers payment plans to help ease the financial burden.
China has launched the eighth batch of satellites for its Guowang internet constellation, lifting off on Aug. 13 aboard a Long March 5B rocket from Wenchang Space Launch Center. Operated by state-owned China SatNet, Guowang aims to deploy about 13,000 satellites in low Earth orbit to compete with SpaceX’s Starlink. Each launch so far has carried only eight to ten re…
At least 56 people have been killed after flash flooding hit a remote, mountainous village in Indian-controlled Kashmir.
Estimates suggest at least 80 people are still missing in the devastated Himalayan village of Chasoti, in the Jammu and Kashmir region, according to local officials.
Rescue teams have brought 300 people to safety, they added.
Chasoti, around 85 miles (136km) northeast of Jammu, is the last village accessible to vehicles on the route of an annual Hindu pilgrimage to a mountainous shrine, the Machail Mata temple.
The devastating floods swept away the main community kitchen, where more than 200 pilgrims were gathered, as well as dozens of vehicles and motorbikes, officials said.
Image: At least 50 other people are reportedly still missing. Pic AP
Abdul Majeed Bichoo, a local resident from a neighbouring village, said he witnessed the bodies of eight people being pulled out from under the mud.
The 75-year-old said Chasoti had become a “sight of complete devastation from all sides”.
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“It was heartbreaking and an unbearable sight,” he continued. “I have not seen this kind of destruction of life and property in my life.”
Image: Chasoti is a remote village in the Jammu and Kashmir region
India’s deputy minister for science and technology, Jitendra Singh, said the floods were triggered by torrential rains.
Sudden, intense downpours over small areas – known as cloudbursts – are increasingly common in India’s Himalayan regions, which are prone to flash floods and landslides.
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Last week, flash flooding swept through a village in the Uttarakhand state
Television footage showed pilgrims in Chasoti crying in fear as water flooded the village.
At least 50 of the rescued people were badly injured and were being treated in local hospitals, local official Susheel Kumar Sharma said.
Officials said the Hindu pilgrimage, which began in July and was scheduled to end on 5 September, has been suspended. More rescue teams were on the way to the area, they added.
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Ramesh Kumar, the divisional commissioner of Kishtwar district, told news agency ANI that local police and disaster response officials had reached the scene.
“Army, air force teams have also been activated. Search and rescue operations are underway,” Mr Kumar said.
Indian Prime Minister Narendra Modi said “the situation is being monitored closely” and offered his prayers to “all those affected by the cloudburst and flooding.”
Cloudbursts can cause intense flooding and landslides, and have increased in recent years, partly due to climate change.
Damage from the storms has also been exacerbated by unplanned development in mountain regions.
Israel’s far-right finance minister has announced plans to build a new settlement in the Israeli-occupied West Bank, which he said would “bury” the idea of a Palestinian state.
Palestinians and rights groups said the settlement would effectively cut the West Bank into two separate parts and rob them of any chance to build a Palestinian state.
This comes as several countries, including the UK, said they would recognise a Palestinian state in September, unless Israel meets several conditions, including agreeing to a ceasefire in Gaza.
Image: Israeli Finance Minister Bezalel Smotrich shows the settlement scheme on a map. Pic: Reuters/Ronen Zvulun
“This reality finally buries the idea of a Palestinian state, because there is nothing to recognise and no one to recognise,” finance minister Bezalel Smotrich said as he announced the construction plans.
“Anyone in the world who tries today to recognise a Palestinian state will receive an answer from us on the ground.”
The settlement is planned to be built in E1, an open tract of land east of Jerusalem, and includes around 3,500 apartments to expand the existing settlement of Maale Adumim, Mr Smotrich said.
E1 has been eyed for Israeli development for more than two decades, but plans were halted due to pressure from the US during previous administrations.
Image: A view of part of the Israeli settlement of Maale Adumim. Pic: Reuters/Ronen Zvulun
Now-US President Donald Trump and the US ambassador to Israel, Mike Huckabee, were praised on Thursday by Mr Smotrich as “true friends of Israel as we have never had before”.
Mr Smotrich, himself a Jewish settler, told Sky News’ international correspondent Diana Magnay that Israeli Prime Minister Benjamin Netanyahu and Mr Trump had agreed to the revival of the E1 scheme. There was no confirmation of this claim from either leader.
The E1 plan has not yet received its final approval, which is expected next week.
Foreign Secretary David Lammy has said the UK strongly opposes the plan, calling it a “flagrant breach of international law and must be stopped now”.
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Is the two-state solution possible?
Construction of homes ‘within a year’
Peace Now, which tracks settlement activity in the West Bank, said some bureaucratic steps remain before construction could begin, including the approval of Israel’s high planning council.
But if the process moves quickly, infrastructure work could start in the next few months, with the construction of homes to follow in about a year.
“The E1 plan is deadly for the future of Israel and for any chance of achieving a peaceful two-state solution. We are standing at the edge of an abyss, and the government is driving us forward at full speed,” Peace Now said in a statement.
It added that the plan was “guaranteeing many more years of bloodshed”.
Image: Palestinians inspect a facility damaged during an Israeli raid in the Israeli-occupied West Bank. Pic: Reuters/Raneen Sawafta
Image: Burnt cars are seen after an attack by Israeli settlers near Ramallah in the Israeli-occupied West Bank. Pic: Reuters/Ammar Awad
Mr Smotrich was also criticised by an Israeli rights group established by former Israel Defence Forces (IDF) soldiers, who accused the far-right politician of encouraging West Bank settlement activity while the world’s attention was on the Gaza war.
As well as official, government-approved settlements, there are also Israeli outposts, which are established without government approval and are considered illegal by Israeli authorities.
But reports suggest the government often turns a blind eye to their creation.
Image: Israeli heavy machinery demolishes a Palestinian building near Bethlehem in the Israeli-occupied West Bank. Pic: Reuters/Mussa Qawasma
In May, Mr Netanyahu’s government approved 22 new settlements, including the legalisation of outposts that had previously been built without authorisation.
Since the Hamas-led attacks on 7 October 2023 and Israel’s subsequent military bombardment of Gaza, more than 100 Israeli outposts have been established, according to Peace Now.
Settler violence against Palestinians has also increased, according to the UN, with an average of 118 incidents each month – up from 108 in 2023, which was already a record year.
Smotrich’s dreams of West Bank annexation never been closer to reality
Bezalel Smotrich is pumped. His dreams of resettlement and annexation of the West Bank have never been closer to fruition.
The E1 settlement plan, which would cut the West Bank from East Jerusalem, was first conceived back in 1995 by then prime minister Yitzhak Rabin.
Thirty years later, the extremist settler contingent within the government seems to be on the verge of making it a reality.
The prime minister’s office has yet to confirm Benjamin Netanyahu’s backing, but according to Smotrich, both he and President Trump are on board.
E1 (or T1 as they say they will call it, in honour of Donald Trump) would be another symbolic blow to the very notion of Palestinian statehood, as is every settlement and piece of related infrastructure which Israel builds in the occupied West Bank.
At a time when the UK, France and others all say they will recognise a Palestinian state unless Israel pushes for a ceasefire in Gaza, Netanyahu’s government is doubling down.
Per Smotrich, their response will come through roads, buildings, neighbourhoods, the spread of Jewish life across Palestinian lands in the West Bank – the creation of facts on the ground.
The UK, France and many others in the international community may not like it, but the real power-broker here, certainly as far as Netanyahu is concerned, is Donald Trump.
He is the president who moved the US embassy to Jerusalem; his ambassador has said there is no such thing as the West Bank.
For the likes of Smotrich, that is all the encouragement they need.
Plans criticised as ‘extension of genocide’
The Palestinian foreign ministry called the settlement plan an extension of the crimes of genocide, displacement and annexation. Israel has long disputed accusations of genocide and rights abuses, saying it is acting in self-defence.
Nabil Abu Rudeineh, the Palestinian president’s spokesperson, called on the US to pressure Israel to stop the building of settlements.
Hamas said the plan was part of Israel’s “colonial, extremist” policies and called on Palestinians to confront it.
Qatar, which has been acting as a mediator between Hamas and Israel in a bid to secure a ceasefire in Gaza, said the move was a flagrant violation of international law.
“The EU rejects any territorial change that is not part of a political agreement between involved parties. So annexation of territory is illegal under international law,” European Commission spokesperson Anitta Hipper said.
Today, an estimated 700,000 Israeli settlers live in the West Bank and East Jerusalem. There is also a growing movement of Israelis wanting to build settlements in Gaza.
Settlers make up around 5% of Israel’s population and 15% of the West Bank’s population, according to data from Peace Now.
Settlements are illegal under international law and have been condemned by the UN. They are, however, authorised by the Israeli government.
Image: Israeli troops stand guard during a weekly settlers’ tour in Hebron, in the Israeli-occupied West Bank. Pic: Reuters/Mussa Qawasma
According to the Israel Policy Forum, the settlement programme is intended to protect Israel’s security, with settlers acting as the first line of defence “against an invasion”.
Mr Smotrich’s settlement announcement comes after the UK, Canada, Australia and New Zealand on Mr Smotrich and his fellow far-right cabinet member, Itamar Ben-Gvir, for “repeated incitements of violence against Palestinian civilians” in the West Bank.
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Stuart Ramsay on West Bank settlers
Foreign Secretary David Lammy said in June that the ministers had been “encouraging egregious abuses of human rights” for “months”.
Last year, Mr Smotrich, whose National Religious Party largely draws its support from settlers, ordered preparations for the annexation of the West Bank.
His popularity has fallen in recent months, with polls showing that his party would not win a single seat in parliament in elections were held today.