Oil Prices down, But Gas Prices Are Scheduled to Skyrocket. China, that's why.

I...LIVE...IN..AMERICAAAAA

For the past few weeks, maybe even a month, I hear James Brown singing "Living in America" every time I fill up the tank on my Honda Civic for about $24. Yes, $24, this translates to about $50 bucks a month for my eco-friendly Honda compared to the 200 I was spending not that long ago. I think we have all been enjoying the low cost of gas and hoping that these prices are here to stay. I've seen a few articles expressing different viewpoints and explaining a loss of jobs or paycuts for folks who depend on the higher gas prices. Recently I found this article on my facebook, and though it is NOT referring to the price of oil, it is referring to the price of gas. The article I enclosed is about how the cost of a utility bill will increase at least $300.00 over the next couple years. I did the math. I have a three bedroom condo with VERY low utility usage. My PG&E bill is about $30 every month. Adding $300.00 annually translates to nearly doubling the cost (additional $25 each month; total $50).

In class we've began discussing Asian countries emerging as these powerhouses that could squish us if they so desired. This article explains how the cost of the gas we use to heat up our water and our homes will increase dramatically because China is willing to spend three and four times what we pay for it and our domestic market is shifting. "The bottom line is that gas prices are set to soar because the long-sheltered domestic market is being linked to global prices via exports." So, gas exports to Asia will drive up our prices. It's difficult for me to explain so I suggest reading the article at the bottom.

I found this interesting because it makes me wonder what this means on a greater scale? What else is going to be effected by this increase? What other domestic markets are going to be effected by global prices and exports? As we blindly and idealistically enjoy the low cost of oil, which may not even be here to stay, we have to acknowledge the cost of gas that will potentially skyrocket and the fact that China is making things a hell of a lot more competitive.

http://www.smh.com.au/business/comment-and-analysis/local-gas-prices-set-to-soar-as-exports-to-asia-get-under-way-20150118-12rl6c.html