According to Chevron CEO Mike Wirth, it’s not just the price of gasoline that Americans need to be keeping a close eye on right now. In fact, there’s another, almost equally important type of gas that might skyrocket in price as we head into the winter months.
What gas is that? Natural gas. The generally clean-burning fossil fuel that has become the preferred fuel to burn for electricity generation, but one that Europe has been cut off from thanks to its economic conflict with Russia and tit-for-tat sanctions.
According to Wirth, who spoke about the matter on CNN on September 13th, “there’s certainly a risk that [natural gas] costs will go up”. Speaking about that and commenting on where prices already are, Wirth said:
“Prices already are very high relative to history and relative to the rest of the world. We’re already seeing this impact being felt in the European economy and I do think it’s likely that Europe goes into a recession.”
Commenting in more detail on Wirth’s comments and how the situation has impacted American energy companies so far, CNN added that:
But he told CNN that natural gas prices could be “significantly higher” this winter in the United States.
Oil prices are up more than 15% so far this year. That has helped boost sales, earnings and the stock prices of companies like Chevron (CVX). Shares of Chevron (CVX) are up nearly 40% in 2022, making them the best performer in the Dow. Rival Exxon Mobi (XOM)l has soared almost 60%.
However, despite warning that prices could go up, Wirth also pushed back on the idea of an export ban, saying: “An export ban runs the risk of taking supplies that are needed in other parts of the world and reducing those which can drive world prices up, which then can affect the price of imports into this country.”
Biden’s Energy Secretary, meanwhile, has urged fuel producers to focus on domestic production rather than exports as prices look prepared to rise, saying “Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports.”
Energy producers like Chevron, whether out of actual concern or just a concern for profits, have pushed back on that plan since it was announced, claiming that it could swamp domestic stocks of fuel and cause them to cut output to maintain profits at a time when more American fuel products are needed in Western Europe thanks to the Russians turning off the gas tap.
However, as the national petroleum stockpile is at its lowest level in decades, stocks of fuel such as diesel have been incredibly low along the Eastern Coast for months now, and fuel prices have been elevated for over a year, a crash in fuel prices in America and glut of supply in fuels like gasoline, diesel, and natural gas would likely benefit many American consumers and offer an opportunity for building back up supply stockpiles at a lower price.
By: Gen Z Conservative