Gallons

Gas prices are down throughout the U.S., but at what cost?

Ally Knighton, Staff Writer

As we barrel into 2016 full throttle, many economies around the world notice a dip in their stock markets, the ripple effect causing the Nasdaq and S&P500 to post their worst start to the trading year since 2001 and worldwide, the worst start to the trading year since 1932. Although many people are reeling, at least we have one thing; those low gas prices!

Unfortunately, our economy and gas prices are heavily conjoined and we could be seeing detrimental effects worldwide for three key reasons; the US Presidential election, the closing of the Chinese stock exchange and rippling across Korea, the Russian recession, and rising tensions between Iran and Saudi Arabia, the world’s top producers in oil.

Over the last several elections there’s been a correlation with overall economy and the cycle of Presidents. There are four parts to the way our economy circulates; prosperity, recession, depression, recovery, and then back again. Many times, a president will enter either in a recession or in prosperity and the cycle will go around by the end of their term and the next president will have these new issues to fix (very rarely does the President enter in a stable economy). So, no, the economy isn’t suffering because of Donald Trump (yet), it simply is a by product of the election as a whole. However, the stock market in East Asia is affecting our stock market right now.

The Chinese Stock Exchange dropped seven points and closed to the general public at the start of this year, causing a ripple effect to spread worldwide. Additionally, the South Korean exchange is in a constant state of turmoil because of the threat of North Korea and nuclear weapons. Because South Korea is so close to an unstable country, the stigma of also being unstable spreads to potential investors looking into stocks in the KOSPI (Korean Stock Exchange) who are then less willing to put money in. As South and North Korea are constantly in a state of war, South Korea is heavily damaged by their sister country, or, ex sister country. Now, Kim Jong Un does not directly affect our gas prices, but Putin does. Well, let me rephrase.

Most of our gas right now is coming from Russia and since the US Dollar is rising in value worldwide, the Russian rouble is not equal and Russian oil sellers are not receiving what they believe to be enough for their product. Unfortunately, they are pretty much reliable for the world’s oil right now so they must take  what they can get. Why is Russia responsible for the weight of the world, or, at least the US?

Because our feuding best friends, Iran and Saudi Arabia.

Saudi Arabia and Iran sit on ¼ of the world’s oil and right now, have ceased diplomatic relations with other after the murder of religious Shiite leader Sheikh Nmir Al-Nmir. Other countries, such as Pakistan, are willing to act if Saudi Arabia makes any more aggressive moves.

So, all in all, enjoy those gas prices while they last. Just know, America is running the Russian economy into the ground and turning a blind eye to rising conflict in the Middle East because of it.