The inflow of hot money, or investments by speculative institutional investors, is the main reason for the recent fluctuation in oil prices, a senior Chinese official said on Friday.

A growing number of speculators in the oil market have exacerbated the uncertainty in oil prices, Zhang Guobao, director of the National Energy Administration (NEA), told the Global Think Tank Summit in Beijing on Friday.

Global oil demand has not seen an obvious recovery in the first half of this year. However crude prices have jumped from $37 per barrel to around $70 per barrel. "The change in oil price cannot truly reflect the demand," said Zhang. "The hot money flow should be regulated more strictly."