“Global Demand for Oil to Plummet,” screams a recent Financial Times headline.   Huh?  No it won’t.  Who are they trying to kid?

Global oil demand is not going to “plummet.”  And for the FT to say so is just plain silly, if not irresponsible.  OK, I know.  There’s an old saying that they teach in journalism schools.  “You have to sell newspapers.”  But this declaration by the FT highlights the perils of letting a headline-writer do your thinking for you.  It’s what I call “arguing a screaming conclusion.”  And a wrong conclusion at that.

Oil Demand – Down, Then Up

But let’s move past the headlines.  The Financial Times article explains that the World Bank has just issued a new study.  The World Bank believes that the world is entering into the toughest economic times “since the Great Depression.”  Thus overall world oil demand may fall by about half a million barrels per

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U.S. oil price rises above $36… UAE follows OPEC deals with Jan, Feb cuts… Expectations of slowing energy demand weigh

Oil rose above $36 a barrel on Friday after the United Arab Emirates joined leading exporter Saudi Arabia in deepening supply curbs in line with OPEC’s biggest ever output cut announced last week.

U.S. crude gained $1.01 to $36.36 a barrel by 1219 GMT, off a session high of $36.90.

London Brent rose 94 cents to $37.55.

“The only positive news (for the market)… came from the UAE,” Olivier Jakob of Petromatrix wrote in a report. “For now at least, Saudi Arabia and the UAE seem to be fully complying with the cuts.”

Abu Dhabi National Oil Co (ADNOC), the main producer in the UAE, the world’s fifth-largest oil exporter, said it would cut supplies of February Murban and Upper Zakum allocations

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OPEC in agreement on need for deep supply cut… Saudi Arabia has cut supply by 8 percent - OPEC president… Russia offers OPEC “concrete support”

Oil topped $50 a barrel on Monday, boosted partly by expectations OPEC will agree on a deep supply cut this week to try to prop up prices.

A weaker dollar also lent support to oil, which has fallen about $100 from a record high of more than $147 in July, as the global financial crisis has hit demand for fuel.

Goldman Sachs has predicted oil could go as low as $30.

U.S. light crude for January delivery rose to as high as $50.50, topping the $50 line for the first time since early December. It was trading $3.00 up at $49.28 by 1421 GMT.

It has rebounded by more than 20 percent from a 4-year low of

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nbsp;Here's what I am reading today ...brbrASIAbrbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601087sid=auPaBwMwwGtgamp;refer=worldwideSTRONGJapanese Business Confidence Plunges Most in 34 Years as Recession Deepens /STRONG/ASentiment among Japan’s largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession. brbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601089amp;sid=ablWg2RUlVmkamp;refer=chinaSTRONGChina Plans to Increase Money Supply in 2009 to Boost Domestic Consumption /STRONG/AChina aims to increase its money supply 17 percent in 2009 and encourage lending to boost domestic consumption and buoy growth in the world’s fourth-largest economy. brbrENERGYbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601072amp;sid=aXp2Rc3B4FSEamp;refer=energySTRONGCrude Oil Rises as OPEC's El-Badri Says Sizeable Cut Is Needed at Meeting /STRONG/ACrude oil rose, touching $50 a barrel in New York, after OPEC’s Secretary-General Abdalla El-Badri said the group needs to make a “sizable” output cut at this week’s meeting in Algeria. brbrA href=http://www.bloomberg.com/apps/news?pid=20601072amp;sid=auG5o.dtUTXMamp;refer=energySTRONGOPEC Collides With Goldman Over $75 Oil in First Demand Decline Since 1983 /STRONG/AThe Organization ...

Job market takes another turn for the worse… unemployment data at 26-year high… Government solution:spend… budget and trade deficits swell more than expected… Byron King on falling oil demand… and what it means for long-term investors… Gold soars… Ed Bugos with some fresh price targets… Signs of the times… Chinese bank opens in U.S., world’s biggest LBO collapses… Plus, Chris Mayer on the automaker bailout

Americans filed over 573,000 jobless claims last week — the most since 1982.

The Labor Dept. also said the number of people collecting unemployment reached a 26-year high too, 4,429,000.

Unfortunately, we’re just getting started if a study released this morning by UCLA is accurate. The Anderson School of Management predicts we will see negative GDP for the current and first two quarters of 2009… and the unemployment rate to

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Goldman cuts 2009 oil price forecast… OPEC should make severe output cut, says president… Russia says ready to work with OPEC on output cuts

Oil fell towards $45 a barrel on Friday, after the collapse of a $14 billion rescue for U.S. automakers caused heavy losses across global financial markets and Goldman Sachs predicted oil could fall to $30 a barrel.

U.S. crude oil for January delivery was down $2.95 at $45.03 a barrel by 1119 GMT.

Prices rallied more than $4 on Thursday to a session high of $49.12 a barrel before dropping back in late trading.

Oil sank to $40.50 last Friday, its lowest in 4 years.

London Brent crude was down $2.98 at $44.41.

The plight of the big U.S. auto firms, including General Motors Corp and Chrysler, illustrates the severity of the global economic downturn that

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IEA predicts 2009 oil demand growth after 2008 contraction… Saudi Nov oil output complies with OPEC target-oil min… Expectations of deeper supply cut by OPEC next week

Oil rose above $45 on Thursday after the International Energy Agency predicted global growth in oil demand would resume in 2009 and Saudi oil minister said OPEC’s top exporter pumped less oil than expected last month.

World oil demand growth would return in 2009 after shrinking this year for the first time since 1983, the IEA, which advises 28 industrialized nations on energy policy, said in a monthly report. It also cut forecasts for supply outside OPEC next year.

“We knew the bad bits, demand down, but the supply downgrade was supportive,” said Rob Laughlin of MF Global.

U.S. crude was up $2.23 at $45.75 a barrel by 1152 GMT, after surging $1.45 to settle at

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The deteriorating global economic scene is continuing to weigh on the outlook for oil demand. And while there are other forces at play as well (the financial crisis and dollar's strength, to name just two), the shaky foundation of the commodity's demand has been the most significant factor in the roughly $100 fall in oil price since July '08.

Given this backdrop, recent projections from the International Energy Agency (IEA) and the Energy Information Administration (EIA) provide useful data points. The former is the energy watchdog of the Organization for Economic Co-operation and Development (OECD), while the latter is basically the statistical arm of the U.S. Department of Energy.

Here are some of the key points from both reports.

Both the agencies see global oil consumption falling in 2008 -- the IEA expects total global consumption to drop by 200,000 Bbl/d [barrels per day], while the EIA is looking for ...

The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell-off has by all measures been overdone.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub-sectors very compelling, in our view. Our best ideas are in the integrated, oilfield service and offshore drilling sub-sectors.

* While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels. * We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of

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The current market turmoil has been particularly brutal in the oil space, with all sub-sectors getting down to levels not seen in years. While expectations of softening oil demand over the coming quarters and broad credit-market concerns have been the primary reasons for the sector's woes, the sell-off has by all measures been overdone.

This indiscriminate sell-off has made the risk-reward trade off of a number of sub-sectors very compelling, in our view. Our best ideas are in the integrated, oilfield service and offshore drilling sub-sectors.

While downside risks still remain, particularly if the global economic weakness turns out to be more protracted than currently anticipated, oil prices are expected to consolidate around current levels. We are strong believers in the secular underpinnings of the oil cycle -- the current downturn is just a pause in a long secular cycle that still has plenty of room to go. The large-cap ...