Submitted by CARPE DIEM

JIDDAH, Saudi Arabia - The U.S. energy secretary said Saturday that insufficient oil production, not financial speculation, was driving soaring crude prices.

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

“Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices,” Bodman told reporters. “There is no evidence that we can find that speculators are driving futures prices” for oil.

He 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 driving the increase in the price of oil.

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