Energy markets might need to be regulated to put a brake on widespread financial speculation that is distorting crude prices, the head of Italian oil major Eni told Il Sole 24 Ore newspaper.
Eni CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position to push prices higher by cutting output, adding that geopolitical tensions, growing U.S. shale oil production and heavy speculation in crude futures were hurting the sector.
"The financial speculation is so strong that it has transformed even those with long term strategies into short term investors," Descalzi was quoted as saying.
"Perhaps we should adopt in the oil sector the sort of regulations and market controls that were imposed on banks. Banks have a central watchdog, while in the past, our regulator was OPEC, which is no longer playing the role it once had."
He said hedge fund speculators no longer believed that the Organization of the Petroleum Exporting Countries (OPEC) was in a position to introduce radical output cuts.
Six OPEC and non-OPEC ministers are due to meet on Monday in St Petersburg to discuss the market outlook and review a global pact on reducing crude supplies that was agreed this year.
Asked if he thought further cuts might be decided, Descalzi said: "I am not optimistic."