The recent fall in the price of oil has been partly caused by speculation in the oil market, Abdalla Salem El-Badri, Secretary-General of the Organization of the Petroleum-Exporting Countries (Opec), told CNBC Tuesday.
"Speculation has just taken a huge chunk off the price," El-Badri said, after US crude futures fell to near a three-week low Tuesday morning.
"There are a lot of factors in the price we're seeing but one of them is speculation."
Last week,Opec cut its forecast for oil demandover growing concerns about slowing growth in developed economies such as the US and Western Europe.
"You can’t deny that there has been some influence from speculation but it doesn't really drive markets, just accelerates trends," Simon Wardell, Senior Oil Analyst at IHS Cera, told CNBC Tuesday.
He added that is was "hard to say" what speculation adds to or takes away from the price.
The price of London Brent November Crude has fallen because of worries about the global economy and excess capacity in the market once Libya returns to normal output under its new government.
OPEC tried to address the shortage caused by political turmoil in Libya by increasing production. It intervened after oil prices scaled record heights earlier this year.
El-Badri said he was "very happy" about the return of Libyan oil. "Libya exports to particular countries such as France, Germany, Italy, and those countries will return to buying from Libya automatically," he said. "Automatically other countries will reduce their production. This will not be difficult." He added that trouble in Yemen and Syria should not have "much effect" on the price of oil.
Wardell said that part of the reason Libya's temporary exit from the market was so important was that it produces light, sweet crude of a type which other countries in OPEC don't have.
"Fundamentally there's still a lot of spare capacity," he added.
El-Badri is not expecting a "double dip" global recession, which is worrying the markets at the moment. "There will be a slowdown at the end of the year but not a double dip. It will pick up again in 2012," he said. "This will affect demand and price will come down."
"I hope this won't go to other countries and cause a reduction in supply," he added.
The Arab Spring has "increased the premium on risks" according to Wardell. "The Middle East doesn’t seem like the safe place it did 6 months ago," he said. The analyst thinks the price will move "generally sideways" in the next few months and then a "bit higher" in 2012 as growth picks up. He added that a further program of quantitative easing in the US could push the price higher.