G7 contemplates oil price woes

Group of Seven financial leaders have opened talks in New York to safeguard the world economy from a potential oil shock.

    US Treasury Secretary John Snow (right) wants stable oil prices

    Fears that near-record oil prices could stall world economic recovery hung over Saturday's gathering of finance ministers from the UK, Canada, France, Germany, Italy, Japan and the United States.

    "I believe that its necessary in the next few days for OPEC to make an announcement that oil production will be raised, and we will continue to press them," British Chancellor of the Exchequer Gordon Brown said.

    "Excellent, good start to the meeting," US Treasury Secretary John Snow said.

    Formal discussions begin on Sunday.

    Spiraling prices

    Security fears and increased demand have pushed oil prices to record highs in recent days.

    But at an informal meeting in Amsterdam, oil ministers of the Organisation of Petroleum Exporting Countries showed no such urgency, postponing any formal decision until their next meeting in Beirut on 3 June.

    OPEC ministers were "deeply concerned" about the near-record oil price, cartel president Purnomo Yusigiantoro, the Indonesian Energy Minister said.

    "The decision will be made in Beirut," he added.

    High prices were a result of several factors," Yusigiantoro said. "Principal among them are gasoline bottlenecks…and increased tensions in some regions of the world," he added.

    In the United States, the risk of high oil and gasoline prices are a political liability in advance of 2 November presidential elections.

    G7 ministers, representing the world's biggest consumers of oil, are expected to send a clear message to OPEC.

    High oil prices complicate the G7 nations' task of maintaining the tempo of the world recovery and stimulating activity in a sluggish Europe.

    SOURCE: Agencies


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