The unintended consequences of a congressional tax proposal could end up being bad news for oil prices.
The House of Representatives is expected to start the debate on a controversial plan to impose a new border-adjusted tax on all imports, and a side effect of that, if approved, could be a surging dollar.
That stronger dollar could backfire on some U.S. industries, and one of them very well could be energy, according to Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch.
That's because a higher dollar disproportionately hurts the economies of the emerging markets, which are the only new area of growth for the oil industry. Dollar-denominated debt becomes more expensive to service for the developing world, and the cost of everything else rises.