With fewer people working in the United States, fewer people have been driving.  It had been assumed that this would cause a new trend of falling consumption of oil, as was the case in the early 1980's.  But hold on there.  Oil prices shot up on Thursday after government data showed that oil inventories unexpectedly fell and consumption may be on the rise again.

This came right on the heels of unrelated reports that the religious right wing Of Israel will likely take control of Israel's government and Benjamin Netanyahu's Likud party will actually be the "moderate" wing of the newly formed hard-line government of Israel.  That will be bad news for Iran and their government's ambitions, as there is now yet another report from the United Nations stating that Iran likely has enough uranium to form a single nuclear bomb.  Israeli leaders have repeatedly stated that capability to be unacceptable.  In fact, Mr. Netanyahu has stated that the Iranian issue is, for him, more important than the world's financial crisis.

Iran's main defense and threat against an Israeli attack would be oil disruptions through the Persian Gulf and beyond.

The combination of oil consumption not falling as much as expected and the prospect of a major war directly involving oil, is a potential recipe for a dramatic reversal of oil prices.  Even the prospect of these combined possibilities is probably good news for crude oil futures traders and investors of exchange traded funds like The United States Oil Fund and Barclay's IPATH ETN.  But what does it mean for the world markets overall?

Today's financial crisis and lack of investor confidence is so deep that there is widespread speculation that Bank of America and Citigroup are the "next" victims.  But that might even be the tip of the iceberg.  For several months, the only glimmer of hope has been cheaper energy prices.  However, oil producing nations are actively trying to raise prices, and if oil were to significantly rise once more, could the world economy even sustain it without another dramatic leg down?

Forget shorting the exchanges.  Many have forgotten that high oil prices seemed to have triggered the current global financial collapse in the first place.  If it were to happen again, wouldn't our problems be multiplied?  Many "peak oil" devotees even suggest that the issue could be much more pressing now, with new reports suggesting that Russian oil production - the second largest in the world - has fallen unexpectedly in 2008, possibly leaving Saudi Arabia with an increased future production burden for the world.

Just as it was in 2008, if 2009 is going to get any worse, you can bet that oil prices probably had something to with it.