Per the Associated Press, starting July 22nd, China imposed a government plan to reduce Beijing’s air pollution in preparation for the Olympics. Their program sought to take 1.65 million cars off the roads. The two-month operation has banned cars with odd-numbered license plates one day, even-numbered plates the next. In addition to the ambitious traffic plan, chemical plants, power stations and foundries have been ordered to cut emissions by 30% and some 300,000 heavily polluting vehicles like aging trucks have been banned.

Almost in unison, oil and subsequently gas prices have started to drop in the United States. Gasoline prices have fallen again overnight extending declines for the 24th straight day. This is down more than 7% from the record high hit on July 16th. Gas prices have eased substantially in recent weeks amid signs that global demand for petroleum products is slowing down.

Looking at this I cannot help but wonder whether in this much smaller economic environment of global inter-dependencies, with supply, demand and speculators, the efforts the Chinese have made for a cleaner Beijing are temporarily driving US gas prices down.

Less demand in China (or speculation of less demand) – more supply for the rest of the world – lower prices in the US?