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Some interesting facts on oil supply and demand.

• World oil production was up 2.5 percent in the first quarter of 2008 over the same period in 2007 while world oil consumption rose by just 2 percent.
• Although U.S. crude oil inventories have fallen, gasoline inventories are at their highest since March, 1993
• The U.S. consumed 4 percent less petroleum in January 2008 than it did the year before.
• China's thirst for oil is abating somewhat. Its demand for oil, which once rose at 10 percent per year, has now dropped to 6 percent per year.
• World surplus oil production capacity has gone from a very tight 1.5 million barrels per day a couple of years ago to more than 3 million barrels today
• Since September 2003, the total number of open crude oil futures and options contracts rose by 364 percent. Meanwhile the global demand for petroleum rose by just 8.2 percent.

Source: ReasonOnline

It would appear that speculation may be a bigger contributing factor than you acknowledge.

[justa-hairyape]

China's thirst for oil is abating somewhat.

China also suffered two devastating natural disasters in just the past 6 months (cold winter and earthquake). Over half a million structures were destroyed and over 100,000 businesses demolished. Their oil demand right now should be way down. Heck, they cannot even get oil to some earthquake damaged regions.