Bangladesh News

Mar 17th
Home arrow News arrow Business News arrow G-8 Energy Chiefs Discuss Oil Prices
G-8 Energy Chiefs Discuss Oil Prices PDF Print E-mail
Monday, 09 June 2008

G-8 Energy Chiefs Discuss Oil Prices

Deep Doubts That Their Actions Can Alleviate Markets

AP, News
Energy chiefs from the world's industrial powers huddled for talks on soaring oil prices Sunday amid deep doubts that their actions can quell markets - or stave off damage to their economies - anytime soon.

Ministers from the Group of Eight nations met in northern Japan in the morning to discuss energy security. They are to be joined later in the day by China, India and South Korea for talks on oil and gas markets, energy investment and climate change.

Five top energy consumers - the United States, China, Japan, South Korea and India - urged oil producers Saturday to boost output to meet growing demand, while pledging to develop clean energy alternatives and increase efficiency.

But U.S. Secretary of Energy Samuel Bodman warned against hopes for a quick fix.

"We have been three decades without really working on this issue, and it's only been the past three or four years that we have really focused on it," he told reporters Saturday. "This has been a long time coming, and it's not going to be something we're going to work our way out of in a matter of months or even a year or two."

Oil prices made their biggest single-day surge on Friday, soaring $11 to $138.54 on the New York Mercantile Exchange, an 8 percent increase. That followed a $5.50 increase the day before, taking oil futures more than 13 percent higher in just two days.

World oil production has stalled at about 85 million barrels a day since 2005, while global economic growth - boosted by spectacular surges in China and India - has pushed demand to unprecedented levels.

Analysts have also cited the decline of the U.S. dollar, fears about the long-term supply of oil and aggressive speculation as factors in rising prices.

Despite calls for some market relief, the current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no new decision on production levels until its Sept. 9 meeting in Vienna.

The five nations meeting in Japan on Saturday, which account for more than half the world's consumption of energy, agreed that the sharp surge in oil prices was a menace to the world economy and more petroleum should be produced to meet rising demand.

They argued that the unprecedented prices were against the interests of both producers and consumers, and imposed a "heavy burden" on developing countries.

The ministers also vowed to diversify their sources of energy, invest in alternative and renewable fuels, ramp up cooperation in strategic oil stocks in case of a supply shortage, and improve the quality of data on production and inventories available to markets.

The group diverged somewhat over oil subsidies. The International Energy Agency has estimated that oil subsidies in China, India and the Middle East totaled about $55 billion in 2007.

The United States, which has its own energy subsidies, urged countries such as China to lower its oil supports, which enable domestic consumers to enjoy cheaper gasoline. Subsidies shield consumers from higher prices, meaning consumption does not decline despite rising expenses.

But China and India, while signing on to a statement recognizing the need to eventually phase out such subsidies, argued that removing such supports quickly could trigger political and economic instability.

India is already facing such effects. The government on Wednesday hiked gasoline and diesel prices, triggering protests by angry consumers who blocked rail tracks and roads and shut down businesses.

Comments Add New
Write comment
  We don't publish your mail. See privacy policy.
Please input the anti-spam code that you can read in the image.
< Prev   Next >