NEW YORK (CNNMoney.com) -- Oil prices sank nearly $5 on Thursday after China said it would raise gas prices by lifting subsidies that have been blamed for driving oil prices higher. The move could curb demand from the country's rapidly growing economy."The news out of China surprised the market," Ray Carbone president of Paramount Options, said from the NYMEX floor.
In the United States, gas prices fell for the third day in a row. The national average price for a gallon of regular gas fell two-tenths of a cent to $4.073 from $4.075 the day before, according AAA.
Not really a surprise. China subsidies their fuel price and fixes Chinese currency to promote their own growth, however, the rapid rise of fuel prices threatens their global export demand.
If an American family is pumping all their dollars into gas, there is no money left to buy Chinese goods that dominate local retailers.
Fear of market destruction forces correction.
There appears to be no "fear" of this (or few checks and balances) in the oil/political/speculation machine here to protect our own economy.
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