|The government of India, which imports 70 per cent|
of its oil, has cut back on fuel subsidies [AFP]
Energy officials from the US and Japan met representatives from China, India and South Korea in Aomori, Japan, on Saturday before talks with the whole Group of Eight nations.
They released a joint statement after the meeting declaring that they "share serious concerns over the current level of oil prices".
"These prices are unprecedented and against the interest of both consuming and producing countries. They pose a great burden, particularly on resource-scarce developing countries," it said.
Before the meeting, Sam Bodman, the US energy secretary, had called for more countries to scrap fuel price subsidies saying that further regulation of the oil markets would not solve the problem.
"It's a shock, but if you look at the rate of oil production globally, it has been 85 million barrels a day for three years in a row," he said.
"We know demand is increasing because a lot of nations are still subsidising oil, which ought to stop."
Bodman stopped short of calling on Organisation of Petroleum Exporting Countries (Opec) to pump more crude, but said producers should allow for greater investment.
Friday's jump in the oil price doubled the previous one-day record, set the previous day, and extended a run that has seen prices rise sevenfold since 2001 as investors and speculators see producers struggling to keep pace with demand.
The price of oil has risen 44 per cent this year.
John Sfakianakis, chief economist at the Saudi British Bank, said speculation and the softening of the US dollar was contributing to rising oil prices.
"It very much has a lot to do with the weakening US dollar. This is a protracted event that we have seen over the past few months - the weak dollar pushes oil prices up," he said.
"Today we are seeing a very different take in the global oil market. In the 1970s, the US economy went through a slowdown. Today, the US economy is in a slowdown mode but oil prices continue to go up.
"That is because other economies, particularly in Asia, continue to devour oil."
John Kilduff at MF Global brokerage firm, said: "Demand is now fully the focus of market participants. The demand stalwart, Asia, is finally buckling, as emerging economies in the region are cutting fuel subsidies."
Ending fuel subsidies has caused other problems for governments as protests have gripped many countries as consumers have seen prices rise dramatically.
India's government, which imports 70 per cent of its oil, cut fuel subsidies earlier in the week, causing an 11 per cent rise in the cost of petrol.
Strikes and protests against the government decision spread across India, paralysing transport in two key states and hitting businesses in Hyderabad and Kolkata on Friday.
Malaysia's government has also slashed fuel subsides, causing prices to nearly double.
After a chaotic rush by drivers to fill up on the last of the subsidised fuel, riot police were deployed in the capital Kuala Lumpur anticipating a backlash from angry protesters.
The International Energy Agency has warned that oil demand would rise by 70 per cent if governments continued with their current policies.
World governments must start a $45 trillion "energy technology revolution" or risk a 130 per cent surge in carbon emissions by 2050, the consumer watchdog said.
Opec has regularly rejected calls to increase production saying the market is well supplied.
But fears that supplies could be hit contributed to Friday's rise with traders reacting to remarks from Israel's transport minister which suggested that Iran, Opec's second biggest producer, would be attacked if it did not abandon its nuclear programme.
Source: Al Jazeera and agencies