The probe into speculators causing oil price increases is “a waste of time,” according to oil billionaire T. Boone Pickens.

The Commodity Futures Trading Commission, the commodity regulator, is investigating how much of oil price increases are being caused by speculator manipulation, as opposed to supply and demand.

Pickens says, don’t bother. “There’s nothing to it,” Pickens told Bloomberg. “That’s not what happened.”

Pickens has been called the “oracle of oil” for correctly predicting rising oil prices. Last fall, he said prices would reach $100 a barrel.

Although OPEC and many experts blame speculators for creating a price bubble, Pickens said inadequate supply and growing demand, especially from China, are causing price increases — period.

Oil prices will keep rising — even going to $150 a barrel — until something is strong enough to kill demand, asserts Pickens, founder and chairman of BP Capital.

The world has 85 million barrels a day of oil available and 86.4 million barrels of demand.

“So the oil price is going to go up until you kill demand. The commodity market doesn’t have anything to do with the price of oil,” Pickens says.

Blaming speculators is an effort “to find some scapegoat,” he says. Pickens was attending a wind power conference in Houston when he spoke.

Although Americans say they’re driving less, slackening demand here is being replaced by rising demand in China. Americans are using 400,000 fewer barrels this year than a year ago, but the Chinese are using 500,000 more, he pointed out.

The U.S. Energy Information Administration predicts world oil use to grow by 1.2 million barrels a day this year. U.S. consumption will fall by about 190,000 barrels a day this year due to an economic slowdown and higher prices, and another 300,000 barrels a day due to ethanol use.

Oil prices will stay over $4 a gallon through at least this summer, predicted EIA head Guy Caruso at the Reuters Global Energy Summit.

“You've got this global market still operating at very low spare capacity, all of which is in Saudi Arabia,” he said.

The agency will reduce its estimate for U.S demand by 100,000 barrels a day, Caruso said. But it’s also seeing unexpected supply shortfalls from Mexico and Russia.

“Once again, our projections for 2008 additions to supply from non-OPEC countries have been revised downward,” he says.

The U.S. imports $700 billion of oil a year, 72 percent of its oil use, Pickens said. “It’s a huge cost for the country,” Pickens says.

Using more natural gas for transportation, instead of electricity generation, is the key to cutting oil imports, he argues.

Using natural gas, “you could cut imports by 38 percent, and that is a big number,” he says.

Wind energy can pick up the electricity slack, said Pickens, who is building a $10 billion wind farm in Pampas, Texas. His Mesa Power recently placed a $2 billion order for 667 turbines for the project’s first phase.

“Pampas will be the wind capital of the world,” he says.