Global Oil Consumption Drops

Global oil consumption is expected to be only 85.8 million barrels a day this year, a slight decrease (200,000 barrels a day) from 2007. This is the first time in 25 years that year-to-year consumption (or demand) has decreased. It's projected to drop again in 2009, relative to 2008.

The last time this happened, in 1983, we were recovering from another economic crisis.

Decreased demand is why oil prices have dropped below $50 a barrel. It's also why gasoline prices have dropped $2 a gallon throughout the country (at least for regular gas).

In the U.S., about 60 percent of our oil use is related to transportation; about 45 percent of our oil use is in the form of gasoline. Thus it's not a big surprise that Americans drove fewer miles in 2008 than in 2007.

However, in the rest of the world, oil used more often for space heating and power generation than for transportation. Oil accounts for 39 percent of total world energy use; natural gas is 25 percent (ppt).