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Oil prices fall to pre-Ukraine invasion levels

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Yahoo Finance markets reporter Ines Ferre outlines the decline in oil prices and the outlook on how a price cap for Russian oil could alleviate inflation.

Video Transcript

[MUSIC PLAYING]

DAVE BRIGGS: With another reminder today of red hot inflation, there is some good news for consumers. Gas prices falling another $0.03 today, down about $0.15 in a week, about $0.40 over the last month. And that's for right here with a corresponding drop in oil prices recently. Ines, what are we seeing?

INES FERRE: Yeah, Dave, and during today's session, we saw oil plunge as much as 4%. Let me show you the Wi-Fi interactive board so you can see the downturn that we saw here. And these levels hadn't been seen since prior to the Russian-Ukraine invasion. Now, the market was spooked by the possibility of 100 basis points rate hike and what this would do to demand. So really, demand concerns is what has been driving oil prices lower.

Today, you did had a Goldman note saying that demand for crude oil still outpaces supply, but that didn't do too much for oil prices. And look, the bearers really have a case here because we did see some EIA data that came out this week that gasoline demand was down 14% last week. Also, we've seen gas prices going down the fourth consecutive week of declines. And as you mentioned, gas prices are relief at the pump for consumers.

- And then as we know that Treasury Secretary Janet Yellen recently spoke in support of a Russian oil cap. What did she say and how would that work? Yeah

INES FERRE: She spoke about this in Bali. She said that a Russian oil cap would be a powerful tool to fight against inflation and to give relief at the pump for Americans and people around the world. And the way that it would work is that it would be a cooperation between different countries, that they would ban insurance that is needed and transport services that's needed for Russian oil to leave out of Russia, unless that oil is sold below a certain level.

Again, this would need the cooperation of countries. The US would want China to get on board. And even though there has been a sort of de facto ban on oil from Western countries, you still have Russian oil that has made its way into China, into India, and into Latin America, guys.