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China Saint Louis

Gas prices

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The gas price is creeping up again. This weekend the regular unlead costs about $3.00 here in St. Louis. Last time it broke the $3 barrier is post Katrina. It seems siutation is not going to improve in the near future due to geopolitical reasons (Iran, North Korea), more importantly, the supply and demand trend. A few days ago I heard from NPR that number of cars in China increased 3 fold in past 3 years. I can tell it by visiting the apartment complex in Shanghai (so many cars, so little packing space). It’s good to see people are enjoying the “freedom of cars” in China, just like the American enjoyed in 1950 and 1960s. That was also the hey days of American car makers. There are certainlly problems comes with “car freedom” in China: traffic jam, air pullution, tensions between the “have” and “have not”, etc. The solution, however, won’t be simple. One top oil investor said “unless American got rid of the big SUVs, Chinese go back to bicycle, we are not going to see $1.50 gas”. Yes, I know, those 77 cents per gallon days is gone forever, that was 1998. The thing is at this price level, I don’t see most people reducing too much driving, not the middle class American and newly-emerged Chinese car lovers. I think for the people to take notice, the price must go higher. Maybe we will see $5 gas soon?

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