I think very lilttle of the consumption drop will be back in the US but it should be seasonal if I'm right about the housing market. Most of the home building is itself through the summer in a lot of US. So I think its pretty save we have seen a pretty much permanent drop of 700,000 bpd at least from housing. Also as we head into the winter again if I'm right and housing is the major cause we should see winter demand remain robust and close to last years levels.

I doubt it drops much more and we may see some slow growth just from population growth alone.

China and India's economies are slowing but they are still growing plus these new lower prices may cause a rebound in some of the poorer parts of the world. If world oil demand is growing at 1% a year and this winters demand is robust and we simply include export land and continued growth in China/India albeit slower then we probably won't see demand drop at least in the US. However the housing industry throughout the world is finally pretty much slowing everywhere so we should see demand declines say in Europe and Australia for example or at least flattening. So overall worldwide demand should be fairly flat once all factors are taken into account at best growing slowly.

As far as the Saudi's continuing I don't thinks so. But overall from here on out its really supply thats going to be setting the price not so much demand. If supply remains adequate then the world economy probably will basically stagnate however if it drops then we should see much higher prices and the world economy move closer and closer to overall shrinkage.

However the world economy is so large today I'd have to think that it may take several years just to slow down out of shear inertia alone. We are coming off of whats probably the biggest bubble the world has ever seen or will ever see for that matter. Its simply going to take time to deflate it.

Think about it 700,000 bpd ?

Well we saw one of the largest industries in the US tank (housing) and its heavily dependent on transportation. We saw the price go high enough that commuters that could would have switched to a more fuel efficient car. Combined now matter how you weight it these are one time gains. Where would we drop another 700,000 bdd ? Going from 15 mpg to 30 mpg is great but the next step is 30 mbp -> 40mph.