Surging Oil Prices May Slow Global Economy

Oil prices topping $130 a barrel may slow global economic growth, Japan's trade minister said, urging the world's biggest energy consumers to cut back on demand.

Crude oil climbed more than $10 to $138.54 a barrel in New York on June 6, prompting U.S. Energy Secretary Samuel Bodman yesterday to describe the market as ``shocking.'' Rising oil prices may slow the global economy this year, which the World Bank forecast in January would expand at a more gradual pace of 3.3 percent compared with 2007, citing a poor U.S. outlook.

U.S. Fed policy makers in April trimmed their economic growth projections for this year by about 1 percentage point to between 0.3 percent and 1.2 percent.

Advancing oil prices ``will add to the downward pressure on global growth,'' the International Monetary Fund's First Deputy Managing Director John Lipsky said in a Bloomberg interview on the sidelines of the International Economic Forum in St. Petersburg, Russia, yesterday.

Economic Slowdown

China, Japan, India, South Korea and the U.S. expressed ``serious concerns'' about oil prices and called on producers ``to increase investment to keep markets well supplied,'' according to a joint statement issued after energy ministers and officials from the five nations met yesterday.

South Korea's government said today it will provide 10.5 trillion won ($10.1 billion) in tax rebates and subsidies to help consumers and businesses cope with surging energy costs.

Australian Prime Minister Kevin Rudd urged the Organization of Petroleum Exporting Countries, which produces more than 40 percent of the world's oil, to boost supplies.
OPEC has no plans to change output before its scheduled meeting in September, Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said on May 22 in a phone interview from Doha.