WASHINGTON, June 30 (Reuters) - Fundamentals are currently determining the direction of crude oil prices but speculators are amplifying those moves, the head of the International Energy Agency, Nobuo Tanaka, said on Tuesday.

Tanka also told reporters he was concerned about investment in unconventional sources of oil, but added many oil fields could be developed at current prices.

Optimism that a potential economic turnaround could lift flagging oil demand has sent crude up from below $40 a barrel in February to over $70 a barrel this week. On Tuesday, prices dropped more than 3 percent, below the $70 mark after grim U.S. consumer confidence data.

(Reporting by Ayesha Rascoe and Roberta Rampton; Editing by David Gregorio) Keywords: IEA OIL/

(matthew.robinson@thomsonreuters.com: +1 646 223 6052; Reuters Messaging: matthew.robinson.reuters.com@reuters.net)

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