Last year, world oil consumption dropped by the biggest amount since 1982.
World oil consumption fell by 1.2m barrels per day (bpd) in 2009, the second consecutive annual decline and the largest volume since 1982, BP said in its annual Statistical Review of World Energy today.
Why then has the price of oil tripled from $32 a barrel at the beginning of 2009 to over $93 a barrel today?
The answer is not the tightening of our fuel supply. Production has risen from 84.3m bpd to 86.4m bpd in that same time period.
What was Morgan Stanley doing hiring supertankers to store oil at the start of 2009?
Since the formation of the Intercontinental Exchange (ICE), Big Oil has teamed up with Wall Street to manipulate Brent Crude. Instead of negotiating low long-term costs for its customers, Morgan Stanley and other broker dealers have jacked up the price point and raked in monstrous fees.
Congress and the regulators cracked down on the ICE loophole in June 2008, after which the price of crude collapsed from $147 to $32 per barrel. Morgan Stanley was then forced to take physical delivery of the oil it had bet on, which was stashed offshore in tankers.
As 2009 began, the Wall St.-City of London crew found a new method of rigging the oil market. Using foreign exchange swaps, brokers borrowed in one currency and flipped it to another, to be used for financial speculation. At $4 trillion a day, these firms could ratchet up the global oil price and cash out to repay the loans with profit. Morgan Stanley received $2 trillion in 0% loans from the Federal Reserve, which were swapped at foreign offices.
In March, Goldman Sachs launched a "dark pool" trading platform in Hong Kong, which hides their betting positions. They were soon joined by ICE co-founders Deutsche Bank and Societe Generale.
Evidence of Wall Street’s involvement with China in the FX derivatives market emerged when state-owned companies were hit with billions in fees, as noted by DealBook:
Citic Pacific, a Hong Kong-based conglomerate almost one-third owned by the state enterprise China International Trust and Investment Company, reported real and potential losses valued at more than $2 billion in December on foreign exchange positions gone wrong. Its chairman and managing director later resigned.
A month later, three airline companies — Air China, Shanghai Air and China Eastern — posted total losses of 13.17 billion renminbi, or $1.94 billion, on fuel hedging contracts...
Angry Chinese regulators claimed that the companies had a right to walk away from bad bets on the commodity market, reported Reuters:
A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
...Spokespersons at Goldman Sachs and UBS declined comment, and media officials at Morgan Stanley and JPMorgan were not immediately available for comment. All are major global providers of commodity risk management.
While overseers in the city begin to gather information on the exchanges, a "ghost fleet" of cargo ships is anchored off the coast of Singapore, where Morgan Stanley and other brokers have launched a new Pan-Asian dark pool. The oil speculation game continues, breaking basic economic laws, as our media points to the phantom Chinese GDP...
Update: Another indicator which demonstrates the drop in demand since the beginning of 2009 is the Baltic Dry Index. (h/t nathguy)