Electricity costs to heat up in coming months

U.S. natural gas soared last week, as the war in Ukraine continues to inject a fear premium into global energy markets.

Driving the news: Prices for U.S. benchmark Henry Hub natural gas — named for a pipeline junction in Louisiana where physical delivery occurs — jumped more than 10% last week alone, to over $8 per metric million British thermal units.

• The surge erupted as Europe appeared close to imposing an embargo on Russian crude oil, a move that would raise global demand for other kinds of energy that can be imported, like liquified natural gas.

Why it matters: Natural gas is the fuel for about 38% of American electricity generation — so higher natural gas prices mean higher electricity prices.

The bottom line: Electricity prices were already up 11% from the prior year as of March, according to the latest Consumer Price Index. That's the fastest one-year rise since 2006. Don't expect any relief over the next few months.