This recession, or whatever it ends up to be, is still in the first inning.

U.S. oil consumption in the midst of a great economic slump is probably the major unknown. Currently our consumption is down by about 8.5 percent, (4.3 percent for gasoline) due to the high prices of last summer and the stagnating economy.

NVDL: The insight to be drawn from this is that while the econonmy (consumption) constracts by X amount, energy prices contract a lot less. This is because energy prices are fundamental to all economic activity. They used to be the blood, and oxygen of economies. Now higher energy prices are like a toxin causing economies to convulse, and in many cases collapse.

clipped from www.fcnp.com While waiting to find out how many million barrels of daily oil production OPEC says it will cut, it's a good time to review the financial-energy situation as the two are now inextricably linked. As is well known, the most prominent features of the landscape for the last few months have been plummeting oil prices and a deepening economic crisis. So far oil prices have been falling faster than the economy seems to be coming apart, thereby giving many the impression that cheaper gasoline will soon heal our economic woes and all will be well. The scariest factor at the minute are reports that smaller traders, that have been an essential part of moving oil across the globe, can no longer get financing for oil shipments - though Exxon, Shell, BP and WalMart don't have to worry about such things. This lack of loans is forcing many traders to the sidelines leaving the market to only the largest participants.