WHAT IS OIL EXPENSE INDICATOR?

http://www.reuters.com/article/2011/08/12/oil-economy-idAFL6E7J42KO20110812

MY RULE OF THUMB:

THE MOMENT CRUDE OIL GOES ABOVE $80/BARRELL, ECONOMY STARTS SHRINKING DUE TO ENERGY STARVATION.


Reuters article from August 2011:

Meaningful Quotes:

* Oil cost relative to GDP well above affordable level
    * Oil price x consumption / GDP "critical" above 5 pct
    * Previous breaches of 4.5 pct have brought recession
    * Oil prices must fall far, fast -- and then stay low



"There is still a chance that oil prices will go down very
significantly, and that could be a strong support to the
economy. But if prices stay near $110 per barrel until the end
of the year, we will have a major problem by the start of 2012,"
he said. 
    "We either get sharply lower prices or a recession that will
bring down prices. Either way, oil prices must come down."

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