Swings in oil prices have been exacerbated by private over the counter derivatives market
Tighter regulation should be imposed on trade in oil based financial instruments to curb volatility in oil prices, OPEC's secretary general Abdullah al Badri told the Financial Times.
Swings in oil prices have been exacerbated by the private over the counter (OTC) derivatives market which often exerts greater power than underlying oil supply and demand, he told the paper.
Badri told the FT: "When we see this swing of eight, nine, 10 dollars, it concerns us, it really concerns us. We cannot avoid volatility, it will be there, but it should be in a reasonable range."
He added: "I'm not asking to eliminate this OTC business, what I am saying is let us have adequate regulation."
Badri participated in a two day meeting of energy officials this week in London to discuss the links between the physical and financial markets for energy and the regulatory framework.
As well as the Organization of the Petroleum Exporting Countries, the International Energy Agency and the International Energy Forum hosted the talks, which were attended by a range of oil market experts.
Badri has often spoken out against "excessive" speculation and its influence on oil prices, while saying it would be impossible to remove speculation entirely from the market.(Reuters)