Never miss a story from Bradley A. Kearns

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Bradley A. Kearns

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

  • US Pres. Obama to submit a $10 per barrel tax on oil in his 2017 fiscal budget plan
  • The tax is estimated to raise the cost of a gallon of gas for consumers by 25 cents
  • Policy could help lift US headline inflation heavily deflated by the resource’s tumble

Are you new to forex trading? Look at our free Trading Guides.

United States President Barack Obama reportedly proposed a $10-per-barrel tax on oil in his 2017 fiscal budget plan, which is scheduled for release on February 9th. If passed through congress, the policy is expected to be phased in over the next five years. That said, House Speaker Paul Ryan remarked that the plan was “dead on arrival in Congress”, suggesting the plan budget item carried little chance of success.

News outlets have approximated the tax could bring in $32 billion dollars in federal revenue annually. The White House economic adviser noted this was a tax that would be levied against oil companies, but admitted the cost would likely be passed on to consumers. The tax is forecasted to increase the cost of a gallon of gasoline by 25 cents for consumers.

As a possible side effect, if enacted, the plan may help stoke inflation expectations in the United States and beyond. Many central banks and economists have attributed the fall in energy prices have heavily weighed on headline inflation figures, which have in turn been used to at least partially justify extremely accommodative policy stances. Should this important commodity price rebound materially in response to this news or other factors, it could quickly alter the course of inflation trends. The resource has lost nearly 78 percent of its value since its 2008 high.

Oil Tax Proposal