The last I heard, oil had fallen to $128 a barrel, good news, right? Depends on how you want to look at it. Yes, demand is down, but for how long? As demand falls, so will the price, or so goes a little economic axiom.

What could explain it? Consumers using less gas, is one. But the world’s largest market, China, is more like the answer. The Olympics approach and China has started an odd-even plan, Vehicles with odd plates drives one day and then the even drives. This is to try and cut down on the pollution for the Olympics.

That would cut China’s demand in half on a daily basis. This, IMO, is one of several reason for the fall in price. Granted not the only one, but one of the major reasons. This fall looks like a short term fall and will return to regular demand with the end of the Olympics.

Enjoy while you can–higher prices should return.