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Billionaire investor George Soros says that while declining Middle East supply and rising demand by China play a part in the rising price of crude oil, speculators are a key cause of the sharp rise in gas-prices.

In interview with The Daily Telegrah, Soros said that speculators have a strong effect the rising oil price, which hit a record $135 a barrel last week. Soros said that the ‘oil bubble’ will not burst until U.S. and Britain are both in a recession, during which oil prices may drop dramatically.

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“Speculation… is increasingly affecting the price,” he said. “The price has this parabolic shape which is characteristic of bubbles,” he said.

Soros said that the bubble will eventually correct itself but it is unlikely to happen until the recession reduces the demand.

Source: The Daily Telegraph

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