The June 2-6 trading week had started with crude futures in a downward corrective phase "but reversed course violently when Trichet shocked the financial system by pointing to an interest rate hike in July," Jakob said. When the dust cleared, benchmark US crude gained a total of $11.19/bbl for the week. North Sea Brent was up $9.91/bbl overall. Heating oil escalated by $12.90/bbl, and reformulated blend stock for oxygenate blending (RBOB) increased by $8.40/bbl.

When the benchmark crude price was below $125/bbl, Jakob said, "Demand destruction was not evidenced at $80/bbl [or] $100/bbl, but it is now." In May, the front-month crude "traded only a few days above $130/bbl, which means that the breaking point for the subsidized oil economies was before that level" he said.

Malaysia and India joined the list of emerging countries cutting fuel subsidies for their national markets. Subsidy cuts in 2008 represent 9.8 million b/d of oil demand or a third of the world oil demand growth estimated by the International Energy Agency," Jakob said. IEA's forecast of global demand growth in 2008 was "already half what it was at the start of the year, and the trend is to head into one of the lowest [levels of] yearly demand growth of the decade," he said.