OPEC has cut its production that amount but higher crude oil production in the US is helping keep our prices below $50 for now. In fact, US crude supplies are at historically high levels on the back of the recessionary low demand of late. The EIA weekly petroleum report shows oil inventories remain more than 12% higher than last year’s level. If OPEC decides to cut production further this weekend, we could see oil prices climb a bit. But the economic news has to stop deteriorating for a big upward price move to occur.

Oil demand could really tank beyond 1.6% if economic indicators continue to under-perform. Australia and Brazil had 4th quarter contractions, and China’s exports fell more than 25% in February! With many economic analysts such as Nouriel Roubini predicting economic recovery waiting until 2010, its hard to find a floor this year for oil demand contraction.

The silver lining is that energy costs and greenhouse gas emissions are again lower in the US this year. And for us to ensure that trend continues into 2010, we’ll need to maintain a strong focus on efficiency and pass a cap and trade climate bill.

With outstanding leadership and deployment of renewables, we may even be able to make 2008 the year of peak greenhouse gas emissions globally. I’ll keep you updated on that as the numbers roll in…