Too much speculation on prices damages the oil market, says OPEC’s chief. Addressing the 20th World Petroleum Congress in Qatar today, the Secretary General of OPEC, HE Abdalla S. El-Badri said that “excessive” speculation risked “distorting” prices.

He said: “Let me stress, excessive speculation is detrimental to both producers and consumers and can cause prices to detach from fundamentals. It is essential to avoid distorting the essential price discovery function of the market.”

Mr El-Badri suggested that current oil prices were becoming too closely linked with the price of oil bought in advance. This is where buyers take the chance that oil prices will rise higher than the price they paid.

He added: “Between 2009 and 2011, data shows an almost one-to-one correlation between prices and the speculative activity of the net long positions of money managers. This is in terms of both volume and value.”