Janet Yellen Wants You To Brace For Higher Gas Prices This Winter, Pointing To Major Risk Factor

U.S. Treasury Secretary Janet Yellen said on Sunday Americans could witness a rise in gas prices in the winter when the European Union significantly trims Russian oil purchases, reported CNN.

Yellen’s statement comes at a time oil prices have cooled significantly from early June highs. Natural gas prices have also fallen from their late-August highs. Energy prices have slid due to demand concerns as central banks aggressively hike their policy rates to rein in inflation.

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When asked if Americans should be worried about gas prices rising this winter, Yellen reportedly said, "Well, it's a risk. And it's a risk that we're working on the price cap to try to address."

She said the European Union will mostly cease buying Russian oil this winter and ban the provision of services that enable Russia to ship oil by tankers. "That that could cause a spike in oil prices," she added.

On Price Cap Proposal: Yellen said the price cap proposal was designed to lower Russian revenues while maintaining supplies, and help keep global oil prices down. 

“I believe this is something that can be essential, and it's something that we're trying to put in place to avoid a future spike in oil prices,” she said.

Energy prices are expected to remain volatile in the next two months as traders will weigh the impact of lower demand versus supply constraint fears.

Price Action: West Texas Intermediate futures were down 1.66% and were trading at $85.351/barrel. The United States Brent Oil Fund BNO closed 4.48% higher while the Vanguard Energy Index Fund ETF VDE traded over 2.55% higher. The United States Natural Gas Fund, LP UNG closed 1.31% higher.