US Treasury Secretary Janet Yellen said on Sunday that Americans could witness gas prices spike in the winter if the European Union significant cuts in Russian oil purchases, reported CNN.
Yellen’s statement comes at a time when oil prices have cooled significantly from the early June highs. Natural gas prices have also fallen from their late August highs. Energy prices have fallen on demand concerns as central banks aggressively raise interest rates to curb inflation.
Asked if Americans should be worried about rising gas prices this winter, Yellen reportedly said, “Well, it’s a risk.
She said the European Union will largely stop buying Russian oil this winter and will ban the provision of services that allow Russia to transport oil by tanker ships. “That this could lead to an increase in oil prices,” she added.
On price cap proposal: Yellen said the price cap proposal was designed to reduce Russian revenues while maintaining supplies and helping keep global oil prices low.
“I believe this is something that can be essential and we are trying to implement it to avoid a future increase in oil prices,” she said.
Energy prices are expected to remain volatile over the next two months as traders weigh the impact of lower demand against fears of supply shortages.
price action: West Texas Intermediate Futures fell 1.66% to trade at $85.351/barrel. That United States Brent Oil Fund BNO closed 4.48% higher during the vanguard Energy Index Fund ETF VDE traded over 2.55% higher. That United States Natural Gas Fund, LP UNG closed 1.31% higher.
