Severe drought causes Panama Canal to reduce ships per day

This segment was previously recorded on November 3, 2023. The El Niño weather event caused the driest October on record for the Panama Canal since its origins in 1950. The event has caused the Panama Canal Authority to cut daily ship passages from 25 to 18 by February 2024. Questions now arise around global climate change and the impacts it has on global shipping. U.S. Energy Information Administration Industry Economist Josh Eiermann joins Yahoo Finance to discuss these impacts and what they mean in both the near and long term for global shipping. On the immediate impact, Eiermann states: "What we are seeing that is more ships now are being taken off the market and this is causing rates to be higher." He continues, describing the tug-of-war on prices of commodities, such as oil, that pass through the canal: "For very large gas carriers... these are rising quite a lot, however, the market did cool off a bit so what we see is with the freight market we can see prices going up. And then at a certain point, prices reach a level where characters and market participants will start to back off of the market. So those prices will start to decrease a bit, however, with the new restrictions that were put in place, we've seen those prices now again start to pick back up." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.