Oil prices were falling Wednesday as President Joe Biden prepared to ask Congress to temporarily suspend the federal tax on gasoline.
Biden is calling on lawmakers to lift the federal tax on gas for three months and is asking states to take similar measures. The federal government charges a tax of 18 cents per gallon on gasoline and 24 cents on diesel fuel.
A suspension of the gas tax should not have an impact on oil prices. If anything, it might let consumers drive more, if it actually brings gas prices down (which it might not).
Still, Brent crude prices, the international benchmark, fell 4.15% to $109.89 a barrel. West Texas Intermediate, the U.S. standard, dropped 4.7% to $104.37.
So what’s going on? Blame recession fears. Not only is oil down, but the
Dow Jones Industrial Average
are falling too, copper is sinking, while bond yields slip and the dollar rises. “This morning’s market action has recession worries written all over it,” writes Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Crude prices have spiked this year after Russia invaded Ukraine in February, and the government, seeking ways to curb the fuel costs that are driving decades-high inflation, ever since.
It might just take a recession to do it.
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