Financial markets, in turn, are connected with each other through the trading activities of financial intermediaries and through end investors active in more than one market. Systemic risk within the financial system relates to the risk that these inter-connections and similarities render emerging financial instability widespread in the system. Even if the original problem seems more contained, important amplification mechanisms can be at work.
At present, natural gas supplies appear to be sufficient to meet the near-term demands--even with some ongoing shortfall in Gulf production. However, a colder-than-average winter would stress this market, and prices will likely remain vulnerable to spikes until the spring.