US energy secretary: 'Speculation not driving oil price'

Insufficient oil production and not speculation is driving soaring crude prices, the US energy secretary said today.

Samuel Bodman’s comments on the eve of an energy summit in the Saudi port city of Jiddah set the stage for a showdown between the US and conference host Saudi Arabia.

Saudi Arabia has largely blamed speculation in the oil markets for the record prices.

Mr Bodman said oil production has not kept pace with growing demand for oil, especially from developing countries like China and India.

The US official said commodities markets have experienced a huge influx of money from financial investors in recent years, but they have been following the market upward rather than causing prices to rise.