Price discovery of crude oil can not be left entirely unregulated: Jaipal Reddy

February 23rd, 2011 - 6:11 pm ICT by ANI  

Riyadh, Feb 23 (ANI): Petroleum Minister S. Jaipal Reddy on Wednesday said

there is a need to improve the understanding of inter-linkages between the physical

and financial markets to address the issue of price volatility and price discovery.

Speaking at the International Energy Forum (IEF) in Riyadh, Reddy blamed

unregulated over-the-Counter (OTC) transactions and trading in ‘paper barrels’,

along with unbridled speculation activity for the unprecedented oil price rise in


The minister emphasized the strengthening of current regulatory framework for

commodity futures and derivatives market.

“We need to consider establishing position limits and moving OTC activity on to

regulate exchanges.” Mr. Reddy said

“The initiatives being taken in the US, UK and other countries are steps in the right

direction, to bring in regulatory oversight of the physical and financial markets” he


Reddy extended Indian support for further initiatives by IEF and other international

organisations, for putting in place suitable regulatory mechanisms, to prevent a

occurrence of 2008.(ANI)

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