Oil declines, but hold the applause

Oil closed at $136.04 a barrel on the New York Mercantile Exchange, down 3.8%, the biggest daily loss in value since March 19.

In a monthly report released on Tuesday, the Energy Information Administration projected that U.S. petroleum consumption will shrink by 400,000 barrels a day in 2008, nearly 40% more than EIA's June projection of a decline of 290,000 barrels.

The change was "based on prospects for a weak economy and record high crude oil and product prices extending into 2009," the EIA said in the report.

The EIA also said global oil consumption will grow by 900,000 barrels a day in 2008, as demand growth in developing countries will more than offset declines in the U.S. and other developed countries. marketwatch.com

As our industrial base moves to developing counties, those countries are our industrial production base for the consumption of oil multiply that by the increase in desire and ability by workers in those countries to consume the way we do...and you have a lot of global consumption.