Two organizations, one projection: a forecast of 86.9 million barrels of oil per day consumed in 2009.

The International Energy Agency and OPEC arrived at the same projection, suggesting that, in economist Peter Dawson's interpretation that "2009 is going to be a year of a slowdown in oil consumption growth, which is significant."

Moreover, Dawson is quick to highlight what's important in the above: slowing oil consumption growth in emerging markets. Oil consumption in the United States has been falling for more than two years -- it's projected to drop 3.1% in 2008 and another 2.3% in 2009. It's oil consumption in the developing world, primarily China and India, that really moves prices, Dawson said. Oil Monday closed up 52 cents to $115.11 per barrel.

'A small victory, that we'll take'

Right now it appears, for the first time in more than five years, consumption growth (not to be confused with a consumption decline) will slow, he said.

"It's a small victory, that we'll take, regarding the oil markets," Dawson said. "For the first time in a while we'll see some demand relief internationally, and that has to help lower oil prices."

Oil prices are moving up today because of a hurricane which may hit the Gulf of Mexico. It is a signal that it does not take much to move crude prices, which have fallen from $142 to $115, in the "wrong" direction again.

According to Bloomberg, "Crude oil rose for the first time in three days as a storm near Cuba prompted evacuations from rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of U.S. production. " Any disruption in production brought on by the storm would be short-lived.

The news should remind those who see crude moving toward $100 a barrel that the system of supply and demand is fragile. OPEC is talking about cutting production now that prices have fallen. The conflict between Georgia and Russia could still disrupt the flow of oil from Georgian ports. Nigeria remains an extremely unstable country. Recent reports show that China's GDP is still growing at over 10%. That growth relies heavily on gas and diesel to transport exports to shipping facilities.

The drop in oil prices may drive a certain complacency about gas and heating oil prices. It could undercut the big move is the US toward "energy independence." But that would be a sucker play. There are too many pressure points that will keep oil prices high.

Douglas A. McIntyre is an editor at 247wallst.com.

Few in oil circles suggest a reversal in long-term demand characteristics just yet, but without question, oil is trending lower now.

Oil fell $3.39 to $111.62 per barrel Friday as concern that a global economic slowdown will lower oil consumption growth weighed on the market. Oil's slide accelerated after OPEC lowered its 2008 global oil consumption growth forecast to 1.17% from 1.20%, the Agence France-Presse reported Friday. OPEC accounts for about 40% of the world's oil production.

Oil has fallen 24.2% since hitting a record high of $147.27 on July 11, 2008. Still, investors/readers should keep oil's summer decline in perspective: oil traded at $25 per barrel in 2003, and is still up an astounding 346% since that time.

To put the above increase into perspective, if your annual salary was $50,000 in 2003 and it increased 346%, it would be $223,000 today.

A correction, or worse, for oil bulls?

Energy Trader Jim Dietz told BloggingStocks Friday he still isn't an oil bear, but the data points on the oil-bear side of the ledger are starting to accumulate. "Each day now we seem to get another stat that indicates oil consumption is slowing, but I'm not an oil bull yet. I've been hurt too many times by false breakouts to the downside by this market," Dietz said. "I'll keep watching consumption data in China and India. If consumption growth there continues to slow, then I'll put oil-short trades on." Dietz added that he is presently flat, or had no open energy trading positions.

OPEC nations had their most profitable half-a-year ever. According to the FT, "Members of the Saudi ­Arabia-led oil exporters' cartel took home $645bn (£335bn, €430bn) between January and June." That number could get even better in the second half.

OPEC may be doing exceedingly well and it may be building huge sovereign funds to invest in crippled financial companies in the US and EU, but it is taking on a substantial risk.

OPEC has kept is production fairly flat. The organization has done very little to abate the run-up in oil prices. That run-up has been the one of the two or three largest contributors to a slowdown of economies in the West.

A full-blown and deep economic recession is likely to spread from the West to China and India. If the US consumer cannot afford much beyond his mortgage, gas, and food, imports will suffer, perhaps substantially. Falling demand for imports in the US could spread to the energy-hungry countries of the developing world. In other words, demand for crude could collapse as demand for exports falters.

A sharp drop in oil demand could do terrific harm to the pace at which OPEC takes in cash. Record income may seem good for now, but it could drive very unpleasant and unintended consequences.

Douglas A. McIntyre is an editor at 247wallst.com.

Given the smorgasbord of economic demands and concerns -- domestic and foreign -- likely to face the new U.S. president, investors (and taxpayers) can justifiably ask 'Where's all the money going to come from to pay for these programs?'

Legitimate question, but one, for now, we'll let the political process sort out. (Current Gallup Daily Tracking Poll as of August 6, 2008, for the U.S. presidential election: Obama, 46%, McCain, 44%.)

Electing U.S. Sen. Barack Obama, D-Illinois, or U.S. Sen. John McCain, R-Arizona, will produce different programs and revenue priorities, due to the parties' different sources of power, but the argument forwarded here is that -- regardless of who becomes the new president -- the office holder should address transportation in a comprehensive way. Here are the major concern areas:

• Mass transit: We're early into the $4 gas era, of course, but initial U.S. Department of Transportation data indicates Americans are driving less and using mass transit more. The trouble is, many mass transit systems (rail, commuter rail, subway, bus) need to be expanded/upgraded to handle the increased ridership. Bigger, better mass transit systems will save the United States hundreds of billions of dollars in oil costs, not to mention the environmental benefits.

Is the oil market approaching an inflection point?

Investors in selected stocks -- and consumers who purchase gasoline -- certainly hope so. The price of oil has doubled in about two years, pushing gasoline over $4 per gallon in most parts of the U.S. and slowing what was an already anemic economy to a crawl (or worse) in the process.

Oil traded down $3.98 to $120.75 per barrel on Tuesday at mid-day. Oil hit a record $147.27 per barrel on July 11, 2008. Also on Tuesday OPEC President Chakib Khelil further fanned the oil price debate by stating that oil at $123 per barrel "is abnormal" and that prices could fall to $70-80 per barrel, Reuters reported.

Bullish case, bearish case

Given the link between oil's price and U.S. economic growth, BloggingStocks Tuesday asked two economists to outline the bullish and bearish cases for the world's most vital commodity.

Since the middle of July we have been able to breathe a little sigh of relief as oil prices have been heading lower from the recent record highs. However, this morning oil prices are getting a slight boost as traders try to digest additional supply concerns.

Lately, it has been hard to discuss the state of oil prices without mentioning Iran and its controversial President, Mahmoud Ahmadinejad, and that holds true again this morning. Over the weekend, the leader of the Islamic Republic caused even more tension over his country's nuclear program.

Iran has been claiming for the past couple of years that it has only peaceful intentions regarding its nuclear program, but of course the rest of the world, in particular Israel and the United States have voiced openly their distrust, and have claimed Iran has a more sinister intention ... nuclear weapons.

OPEC again lowered its forecast for 2008 global oil demand growth, adding that the economic slowdown affecting the United States and other industrialized nations is likely to lower demand growth in 2009 as well, the group announced (pdf).

OPEC lowered its 2008 forecast to 1.20% global oil demand growth, down from 1.28%. It was OPEC's fourth downward revision for oil demand this year. The new price structure and slower global economy "have helped dampen oil demand growth in many regions," the cartel said in its July report.

OPEC, which accounts for about 40% of the global oil supply, now expects 2008 demand to rise by 1.03 million barrels per day, or 70,000 barrels per day less than the group's previous forecast.

On Tuesday, oil plunged $6.44 to $138.74 per barrel -- its biggest decline, in percentage terms, since March 2008 -- following Tuesday morning testimony by U.S. Federal Reserve Chairman Ben Bernanke, during which the Fed chair said credit market write-downs were likely to slow the already anemic U.S. economy even more, Bloomberg News reported Tuesday. Economist Glen Langan told BloggingStocks OPEC's revised forecast is likely to represent another data point the oil bears will like.

Oil price key: Emerging markets

Oil's four-year bull run to +$140 per barrel has increased the wealth of 'petrodollar' nations, and is about set to propel another shift, this time in the bond market.

Petroleum-exporting nations, such as Saudi Arabia and Russia are set to become the biggest creditor nations to the U.S. Government, Bloomberg News reported Monday.

Holdings of petrodollar nations increased 44% to $510 billion through April, Bloomberg News reported Monday -- an increase pace that's set to displace Japan, which holds the largest amount of U.S. Treasuries, at $592.2 billion.

Oil rose about 20 cents to $145.28 per barrel in late Monday afternoon trading.

At first glance - - investigating whether OPEC will be able to stunt oil's rise to $150 per barrel may seem moot.

Not so, says energy trader Jim Dietz, and he cited three reasons.

First, the oil shorts - - those who believe oil is overpriced / too high - - are likely to mount a rigorous defense of $150. (Oil traded up $4.75 to $146.40 per barrel Friday at mid-day after hitting a record high of $147.27 earlier in the day.) "It will not be an easy barrier to mount. It will be easier to break than the $100 barrier but keep in mind it took several months and at least 5 sequences to break $100, once we got within the range," Dietz said. "Look for almost as tough price resistance at $150."

Second, many oil longs - - those who calculated that oil is trending higher - - will take profits at $150, Dietz said. "The $150 mark will result in many players and institutions cashing in their long trades, on rationality grounds," Dietz said. "For example, if you established trades at $80 or $85, common sense says $150 represents a good time to exit. Likewise for more-daring institutions that went long above $100. The thinking will be 'We're at $150 after a high entry point. How long do we expect this insanity to go on? Let's take some profits and reduce our exposure.' That will add to selling pressure." Dietz added that he is presently flat, or has no open energy trading positions - - his normal stance for a Friday in the summer.

Finally, those facts, combined with already-announced oil production increases by Saudi Arabia, will enhance OPEC's ability to slow gains in the price of oil near/at $150 per barrel, Dietz said. Further, Dietz believes Saudi Arabia will announce still another production increase, perhaps as large as 300,000 barrels, to calm markets, "and eliminate doubts in some energy corners about its spare capacity and ability to ramp-up production."

OPEC President Chakib Khelil Monday blamed the U.S. Federal Reserve for sky-high oil prices, The Associated Press reported, adding that surging prices are not likely to decline.

Khelil said he believes the declining dollar has pushed oil higher and that the Fed's interest rate reductions to boost the U.S. economy are the primary reason for the dollar's decline, the AP reported Monday.

In an effort to jump-start the U.S. economy slowed by the nation's worst housing slump in a generation, the Fed has cut short-term interest rates by 325 basis points to 2% since September 2007.

Khelil's comments did not push oil higher as of early Monday afternoon. Oil traders looked past those comments and focused on the dollar's rise for the day versus the euro and pound, and new data points suggesting a deeper, longer U.S. recession, energy trader Jim Dietz told BloggingStocks Monday. Oil fell $3.70 to $141.59 per barrel, with futures hitting a daily low of $140.15 earlier in the day.

Oil traders adopt 'defensive' stance

"Right now the oil market is focused on the U.S. economy not OPEC's comments, and many were spooked by the Freddie Mac and Fannie Mae announcement. Everything is in pullback mode now, oil, stocks, gold, other commodities. The mood is defensive...preserve capital, basically," Dietz said.

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) may have to raise up to $46 billion and $29 billion in capital, according to Lehman Brothers (NYSE: LEH), Bloomberg News reported Monday. Fannie Mae fell $3.17 to $15.61 while Freddie Mac declined $2.51 to $11.99 in Monday afternoon trading.

The need to fulfill promises of increased aid for Africa, and a general agreement between the United States and Russia on an approach to Iran's nuclear program took center stage as leaders from the Group of Eight industrial nations met Monday in Japan, The Associated Press reported.

President Bush, attending his last summit as a sitting U.S. president, underscored the importance of providing aid for Africa, calling on wealthy nations to provide mosquito netting and other aid to prevent needless deaths, the AP reported.

Basic items - - even equipment as basic as mosquito netting - - can reduce mortality rates in sections of Africa. Mosquito netting prevents children and others from dieing of bites from disease-carrying mosquitoes.

In 2005 the G-8 pledged to increase global aid to $130 billion, and increase assistance to Africa to $50 billion. ONE, a nonpartisan group working to end extreme poverty, predicted that the U.S. and the United Kingdom will meet their commitments, while France, Italy, Germany and Canada are off the mark, Bloomberg News reported Monday.

Increased global food aid likely

Economist Glen Langan, whose specializations include agricultural economics, said increased aid for food and agricultural development will likely be announced by G-8 leaders at the summit, or soon thereafter, due to the rising cost of food's impact on poorer nations. "The aid will be targeted to meeting basic needs first, but with an eye toward directing some funds to self-sustaining agriculture," Langan said, adding that Africa "has the potential to achieve food production gains greater than South America."

Oil fell more than $5 to about $140 per barrel Monday morning after Iran's foreign minister expressed confidence in talks with western governments regarding the nation's nuclear program, Bloomberg News reported.

Iran's foreign minister Manouchehr Mottaki told CNN talks are "in a new environment" and "new approaches" are possible.

A rising dollar Monday morning also helped push oil lower. The dollar strengthened against the euro and the British pound on expectation G-8 industrial leaders will verbally support the dollar at an upcoming economic summit in Japan.

Oil fell $5.14 to $140.15 per barrel Monday morning before recovering slightly to $141.30. The other major energy commodities also plunged in early Monday trading. Heating oil plummeted 13 cents to $3.97 per gallon, unleaded gasoline fell about 10 cents to $3.47 per gallon, and natural gas plunged 42 cents to $13.16 per million BTUs.

Economist Glen Langan, who argues that fundamentals (primarily rising demand) are the major factors determining oil's price, said legitimate progress on the Iran uranium enrichment issue would ease traders' concerns about Iran's supply. "Iran is still OPEC's No. 2 producer and a major exporter of oil, so lasting good news with regard to Iran will ease traders minds about tensions in and near the Persian Gulf. That will take some pressure off prices," Langan said. About 20% of the world's oil flows through the Persian Gulf and the Strait of Hormuz.

Another day, another oil record.

Oil easily pushed past $145 Thursday morning after traders calculated that the already weak dollar has further to fall after the European Central Bank increased a key interest rate by a quarter point to 4.25%.

Oil rose as much as $2.28 to $145.85 per barrel -- an all-time high -- before easing back slightly to trade at $144.40 at mid-day.

Oil tends to rise when the dollar falls as investors/traders seek to preserve purchasing power of the decreased value of dollar-denominated commodities by bidding their price up. However, it's important to note that the dollar/oil correlation is not perfect: there have been instances in which the dollar fell and oil fell.

Many investors / traders are aware of the increasing demand for oil stemming form emerging markets economic growth. Vibrant, dynamic economies in China and India, but also in Australia and the Middle East, have been the biggest factor in oil's four-year bull market, which has brought oil prices to a record of over $140 per barrel.

Moreover, oil sector analysts, economists and executives are counting on continual, sizable oil production increases from non-OPEC nations to help contain oil prices in the quarters and years ahead, but now it appears there may be a problem related to that assumption.

Non-OPEC, OPEC output estimates lowered

The U.S. Energy Information Administration, the U.S. Department of Energy's statistical unit, has lowered its estimate for non-OPEC production in 2010 by 1.1 million barrels per day to 51.8 million barrels per day, from last year's forecast of 52.9 million. At the same time, the EIA lowered its 2010 OPEC production forecast by 400,000 barrels to 37.4 million.

Further, the EIA now sees 2010 global oil demand at 89.2 million -- in other words a statistical balance between daily global oil supply and demand.

Economist Glen Langan told BloggingStocks the projected production reduction is not good news for consumers in either the developed or developing worlds.