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 at the Global Think Tank Summit 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) was quoted as saying by Saturday's China Daily.

Global oil demand has not seen an obvious recovery in the first half of this year. However crude prices have jumped from 37 U.S. dollars per barrel to around 70 U.S. dollars per barrel.

"The change in oil price cannot truly reflect the demand," said Zhang. "The hot money flow should be regulated more strictly."

Many experts have been saying that the money pouring into the oil patch from mutual funds, traders, hedge funds and other financial players are pushing up oil prices.