A call for global agreement on preventing manipulation of the crude oil market is to be made by John Hutton, the Business Secretary, at a meeting of G8 energy ministers in Japan this weekend.

Mr Hutton will propose the sharing of detailed data on oil trading, as well as oil stocks, production and consumption. The plan is designed to increase transparency in the oil market and decrease opportunities for speculation by cutting oil price volatility.

The consultation of energy ministers in Aomori is being held before a meeting of heads of state in July. Ministers from China, South Korea and India will also attend.

The proposals emerged amid widespread concern that “hot money” from hedge funds, investment banks and wealthy traders had been a significant factor in helping to drive the price of a barrel of crude to record highs of $135.09 last week.

Last week the Commodity Futures Trading Commission (CFTC), one of Wall Street's most powerful regulators, announced a wide-ranging joint investigation into oil market transparency with the Financial Services Authority.

Figures published yesterday indicated that speculators had started to cut their bets on higher oil prices since the inquiry had been announced. The CFTC unveiled a package of measures to prevent “manipulation and fraud” in global energy futures markets and said that it was “working closely with Britain's FSA”.

Net long crude positions on New York's Nymex exchange almost halved during the week that ended on May 27 to 25,867, down from 50,060 in the previous week, according to the CFTC. There were similar, sharp reductions in speculative long positions held in contracts for natural gas and heating oil.

Richard Savage, head of energy research at Mirabaud, the Swiss bank, said that the figures represented “quite a big pullback” in speculative bets on rising oil prices. “The key issue is whether this is just a short-term blip - like we saw in early February or April - or the start of a more significant downward trend,” he said.

Other figures showed that the peak in speculative long positions came in July last year, appearing to undermine the argument that the $135 highs of last week were a result of unprecedented speculative activity.

Nonetheless, the British-backed proposals for greater oil market transparency are likely to be welcomed by several G8 members. Yasuo Fukuda, the Japanese Prime Minister, and Angela Merkel, the German Chancellor, expressed support for greater oil market transparency at a meeting in Berlin on Sunday.

A spokesman for the Department for Business said yesterday that the Government believed that “market fundamentals” rather than speculation had been the driving force behind rising prices. However, he added that speculation “may influence prices in the short term and cause price volatility”.

As well as greater action on transparency, Mr Hutton is also expected to seek co-ordinated international action to encourage oil-producing countries to raise output to help to bring down fuel prices. He is also seeking to encourage G8 members to maximise their investments in domestic production.

The CFTC's joint investigation is understood to be concentrating on several areas of potential abuse or manipulation. They include whether the operators of oil storage facilities, pipelines, cargo ships and terminals could issue false data about the supply of available oil and make trades to profit from the misunderstanding.

There are also questions over whether energy traders may abuse a commonly used price reporting system operated by Platts, the energy information provider.

There have been claims that a timeframe used by Platts to determine prices for physical oil transactions could have been used to issue a sudden deluge of orders, thereby distorting prices and allowing traders to earn profits in other markets.

There are fears about similar abuses in the market for jet fuel.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax