China driving oil prices

CALGARY, Alberta, July 1 (UPI) -- With Chinese oil consumption outpacing the United States, analysts say it is the Asian appetite -- not market speculators -- that is driving oil prices upwards.

Paul Ting, energy analyst and president of New Jersey's Paul Ting Energy Vision LLC, told Canadian newspaper The Globe and Mail that it is Chinese consumption, not market speculation, that is driving the surge in oil prices.

"People trying to explain rising prices look at the West and see high inventory and low demand, so they blame speculators," he said. "They are looking in the wrong place -- demand is coming from China. And demand has been robust."

China has pumped billions of dollars into its foreign investment strategy in an effort to secure access to oil as its economy expands even during the global recession.

In a move to gain a foothold in the global energy market, Chinese refiner Sinopec snatched Calgary's Addax Petroleum for $8.3 billion, securing a position in the Middle East, including Iraq. Similar deals were reached with Verenex Energy to clinch a hold on Libyan resources.

Meanwhile, with new-car sales soaring amid a bustling economy, China is set to establish the baseline for oil prices in the near term.

"I hate to say this, but money is no object," said Ting. "I think the Chinese program will put a floor under the price of oil. I'm not sure where the floor is, but it's very bullish for oil prices."