What do those two countries have to do with the price we'll pay at the pump this weekend? Stay with me - I promise to keep it short.
You already know that Greece is in financial trouble. Rumored rescues for the profligate Peloponnese helped send our stock market higher yesterday. But today there are clouds on that horizon. European finance ministers are getting queasy about the economic damage that would come from a bailout. The recovery in Europe is not as strong as it is here and in China. And you can't help someone else (Greece, in this case) pay their bills if you're having a hard time paying your own.
Meanwhile China pulled a surprise move today by increasing reserve requirements for its banks, startling financial markets with the suggestion that below their stolid communist fa?ade Chinese banks may be shaky. (Shocked, shocked about that.) The move will tend to slow economic activity in China by limiting banks ability to lend. So much for that strong economy.
So enough about global economics; here's how all this affects gas prices in Rochester: Europe has already been slow pulling out of recession and China's recovery may slow as well. A slower economy = less demand for energy = lower oil (and gasoline) prices. In the short term you can bet on it.
Now if only it was warm enough to get my convertible out of the garage......
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).