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Russia oil price cap a ‘stupid and futile gesture’ that won’t work, analyst warns
Price cap on Russian oil could backfire: Phil Flynn
FOX Business contributor and Price Futures Group market analyst Phil Flynn discusses the global impact of a price cap on Russian oil.
With a price cap on Russian oil possibly being announced as soon as Wednesday, market experts are weighing in on how it would impact U.S. gas prices during one of the busiest travel seasons of the year.
"I want to steal a line from National Lampoon: It's a stupid and futile gesture, and it doesn't make any sense because price caps absolutely do not work," FOX Business contributor and Price Futures Group market analyst Phil Flynn said on "Varney & Co." Wednesday. "In fact, many times, they have the exact opposite effect."
Flynn made his strong stance against the Group of Seven (G7) nations’ price cap consideration while the U.S. national gas average reached its lowest levels in 268 days, GasBuddy head of petroleum analysis Patrick De Haan pointed out earlier in the show.
G7 nations are looking at a price cap on Russian seaborne oil in a range between $65 to $70 per barrel in response to concerns around top crude importer China, which announced tighter COVID-19 restrictions late Tuesday, Reuters reported.
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"We're watching continued challenges in China with COVID, that is pushing oil prices down significantly as China acts to shut down its economy, which limits oil consumption," De Haan said. "In the last week, [seeing] some of the biggest drops now – prices in Wisconsin down $0.24, California down $0.23 in the run-up to Thanksgiving."