Although the reduction in oil demand growth is partly because of slower economic growth and a projected 1m-barrel-a-day rise in output from the US’s Gulf of Mexico oil fields by 2012, experts also believe that legislation will accelerate the trend. The EIA [Energy Information Administration] expects the energy act to help boost biofuel production from 8bn gallons this year to at least 32bn by 2030, while prompting a 40 per cent efficiency improvement in new cars from 2020.

Congress’s efficiency mandates – the first since those passed in the wake of the energy crisis of the 1970s – have already pushed carmakers to turn their attention to building more efficient diesel cars, and increasing the proportion of diesel cars in the US from 1 per cent to 15 per cent by 2030.

Despite the US reduction of oil imports, Kevin Kerr of Whiskey and Gunpowder says the price of oil is unlikely to decrease.

“According to the most recent data from the U.S. Energy Information Administration, oil demand for countries in the Organization for Economic Cooperation and Development — which includes developed nations like Japan, Germany and the United States — has gone up 14% since 1980. Oil demand for the rest of the world, however, has skyrocketed 43%. That’s more than three times as fast!’

Bill Bonner at The Daily Reckoning says, ‘Ten years ago, China imported 165 million barrels of oil per year. Today, the total is more than 1 billion. Wonder why the price of oil hit a new high last week — above $126 a barrel? Well, China is a big part of the answer.’

Oil futures prices passed $129 a barrel and look set to head for $130 today on the New York Mercantile Exchange.

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