According to latest EIA figures, oil consumption worldwide went down last year from 2006:

 mbpd:

2006:84,726,000

2007:83,980,000

net:-746,000

Supply and Demand?

It is obvious that it is due to financial speculation, oil and other commodities (remember all sorts of commodities not just oil) are facing huge inflationary pressures that nothing, or little to do with "fundamentals". Prices for goods do not increase at these levels with a clear scarcity of goods, like a famine or oil supply-side shock.

To quote:

"Yet Big Oil has been very reluctant to invest in major exploration projects or additional refining capacity, fearing that prices will drop as the economy slows in
the next few years. Since 2005, the big five have handed back $170 billion to their shareholders through share buy-backs rather than invest these profits in more
capacity - or renewable energy sources."
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"While low interest rates have reduced the return from some other financial assets, the rise in crude oil and other commodity prices offer the prospect of big gains from commodity futures."
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Speculators, on the other hand, treat commodities as a financial asset. They buy futures on the expectation that, on the due date, the consignment will be worth more than they actually paid for it under the future contract, so they can sell it at a profit. Even if the price difference is relatively small, speculators can make big profits if they trade on a large scale.
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The capital flowing into major commodity funds shot up from $13 billion in 2003 to $260 billion today. Not surprisingly, hedge funds (unregulated, private clubs of
hyper-rich speculators) and investment banks are involved, using huge sums of borrowed cash to speculate in futures and other complex financial instruments,
such as options and swaps.
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In 2000, the US government, in response to lobbying by energy traders like Enron, relaxed the regulations on trading in commodity markets. Since then, there has
been a six-fold surge in trading volume. "Over the last five years, investors have become such a force on commodity markets that their appetite for oil contracts has been equal to China's increase in demand over the same period, said a hedge fund manager who testified before Congress ... last month..." (Washington Post, 6
June 2008)
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Source: Oil price shock - the chaos of capitalism: Lynn Walsh

Blog: http://perspectivos.blogspo t.com/