Rampant demand for crude oil in the United States is a bigger factor behind sky-high prices than strong demand from China and other fast-growing Asian economies, a hedge fund manager told Reuters. London-listed hedge fund firm RAB Capital's Philip Richards told Reuters in a recent interview that oil prices over time will probably surpass recent record highs unless Western countries curb demand.
"What's really causing the oil price to go up is the fact that America continues to guzzle (gasoline) as if there is no tomorrow," Richards said.
"There really wouldn't be a demand problem on the oil side were the West to adopt a prudent energy-saving regime."
US crude oil spiked up to new records above $62 a barrel after the death of Saudi Arabia's King Fahd this week raised worries about world supplies.
Many oil analysts and traders have recently blamed the rocketing cost of crude oil on higher demand from China and India, where economic growth has taken off in recent years.
But the numbers show a different picture, Richards said. Chinese demand for crude oil in 2002, 2003 and 2004 was 6.4 percent, 7.1 percent and 7.8 percent of total daily demand of 77.9, 79.4 and 82.3 million barrels a day respectively, according to the International Energy Agency.
The IEA expects Chinese demand in 2005 and 2006 to rise to 8.1 and 8.5 percent of world demand respectively. Asian demand is forecast at about 19 percent in 2006, up from 18.6 percent this year and 18.1 percent in 2004.
In comparison, the United States has used up more than 30 percent of world supplies over the last three years, and the IEA sees that figure holding steady this year and next.
For base metals such as copper, however, Richards said China and Asia have made a big difference to prices. The copper three-month futures contract in London rose to a record high above $3,580 a tonne on Wednesday.
Asia is rebuilding its infrastructure after years of neglect and has a huge demand for base metals.
"Building infrastructure is metal intensive," Richards said. "The situation in metals is much more a genuine shortage of supply ... It's a slightly different situation."
China and Asia accounted for around 47 percent of the demand for copper in 2003 and 2004, according to metal consultants CRU.
Analysts expect that number to be higher this year and next.
Total copper supplies of 15.2 million tonnes in 2003 fell short of demand of around 15.4 million tonnes, and in 2004 that gap widened to 850,000 tonnes as total demand rose to 16.8 million tonnes, even as demand from Europe fell.