RIYADH, Saudi Arabia, Jan. 20--US Energy Secretary Samuel Bodman told Saudi Arabia’s oil minister Saturday that OPEC should increase oil output.
Bodman told reporters after meeting with Saudi Oil Minister Ali Naimi that oil production should be increased in order to meet growing demands, AP reported.
Saudi Arabia and the United States have agreed on the importance of keeping world oil markets stable and balanced.
“They agreed on the importance of continuing balance in the stability of the market,“ a statement on the state-owned Saudi Press Agency, issued after the US energy secretary met the Saudi oil minister in Riyadh, said on Saturday.
It said Sam Bodman and Ali Al-Naimi also agreed on cooperation to exchange information on future plans and action for stability in world oil markets.
Bodman’s visit to Saudi Arabia--which has the world’s largest supply of oil--come just before a Feb. 1 meeting of the Organization of Petroleum Exporting Countries meeting in Austria in which the oil group could consider increasing oil production if it deems it necessary.
It also comes less than a week after US President George W. Bush raised the same concerns in Saudi Arabia. Bush said oil prices were very high and “tough on our economy.“
The White House said Wednesday that Saudi Arabia’s King Abdullah told Bush that he was worried about the affect of high oil prices on the world economy--but there was no commitment from the king about increasing oil output.
On Tuesday, Naimi said that Saudi Arabia would raise production levels only when the market justifies it, and that the current inventory seemed normal.
OPEC oil accounts for about 40 percent of the world’s needs, and OPEC ministers often follow the lead of the Saudis when discussing whether to increase production to take the pressure off rising prices.
Crude oil prices inched up Friday after three days of losses as investors struggled with concerns about the US economy.
Light, sweet crude for February delivery rose 44 cents to settle at $90.57 a barrel on the New York Mercantile Exchange on Friday, but prices alternated frequently between gains and losses.

European Central Bank council member Mario Draghi

BRUSSELS, Belgium, Jan. 20--European Central Bank council member Mario Draghi said it is the responsibility of the central bank to fight inflation even as Europe’s economy slows.
“The central bank has the duty to act quickly and firmly“ against inflation, Draghi said during an annual meeting of Italian currency traders and bankers in Bari, Italy. Price stability “will be maintained“, Bloomberg reported on Saturday.
ECB President Jean-Claude Trichet said on Jan. 10 that the bank will act “preemptively“ if it sees signs of a wage-price spiral. Since then some ECB council members have toned down their inflation-fighting language amid signs of a flagging economy. While Draghi acknowledged on Saturday that Europe’s economy was slowing, he stressed the need to keep prices in check in order to underpin employment and consumer spending.
“Strong rises in petroleum and some food costs are weighing on households’ disposable income and crimping their spending,“ Draghi said, referring to Italian families. “Firmly anchored inflation expectations have been the basis for employment growth in the euro zone. This anchoring must continue.“
ECB council member Guy Quaden said the bank shouldn’t “react mechanically“ to current inflation figures and should focus instead on ensuring medium-term price stability. Quaden is the sixth official in the past week to play down inflation concerns.
The US Federal Reserve has cut borrowing costs three times since September to stave off recession in the world’s largest economy after its housing market slumped. The Bank of England and the Bank of Canada also are cutting rates. The ECB’s benchmark borrowing rate remains at a six-year high of 4 percent.
Oil prices are near $100 a barrel, food prices are increasing and inflation was 3.1 percent in December, well above the ECB’s 2 percent limit. Average euro-area inflation would be 2.5 percent this year and won’t fall below the ECB limit until 2009, Draghi said.
The ECB shelved a planned rate increase in September and has since kept its rates on hold to assess the economic impact of the US subprime mortgage collapse, which made banks reluctant to lend and drove up the cost of credit globally.
“What the ECB needs to do is explain what their time frame is for bringing inflation below 2 percent,“ Francesco Giavazzi, an economist and former director-general of the Italian Treasury, said in a phone interview.

DETROIT, USA,
Jan. 20--The world’s two largest automakers are working on ultracheap cars to sell in emerging markets and possibly compete with the $2,500 (1,700 euros) subcompact unveiled last week by India’s Tata Motors Ltd.-Ñbut whether they can match the price remains in question.
During the North American International Auto Show in Detroit, top executives from General Motors Corp. and Toyota Motor Corp. said their companies’ engineers are working on low-cost vehicles similar to Tata’s Nano, AP wrote on Saturday.
“There is a huge market for low-cost/price vehicles,“ Toyota President Katsuaki Watanabe told reporters this week.
Such a vehicle would have to meet Toyota quality standards, Watanabe said, and building a car to sell for $2,500 might be difficult. “To do that properly is very important,“ he said.
GM has bolstered its engineering staff in India to around 1,000 and also has been working on a low-cost car in other parts of the world, Jim Queen, group vice president of global engineering, told The Associated Press in an interview.
GM’s Chinese mini-vehicle joint venture, SAIC-GM-Wuling Automobile Co., already is building a car that sells for around $3,500 (2,400 euros), Queen said, calling the Tata vehicle an impressive way of meeting demand in emerging countries.
Queen said GM could match the Tata vehicle, but it needs to better understand the business case for it before rolling one out. “We are working on our lower-cost architecture to try to see if we can come up with lower-cost versions,“ GM Chairman and Chief Executive Rick Wagoner told reporters.
Such a small car could bridge the gap in an emerging country such as India from its current transportation system to more expensive cars as wealth increases, Queen said.
Watanabe said that last year he drove an early prototype of Toyota’s low-cost vehicle but said it wasn’t at a stage where he could give the go-ahead for production.
The cheapest new car currently sold in the US is a version of the 2007 Chevrolet Aveo at $9,995 (6,803 euros), according to the Edmunds.com automotive Web site.
The basic Nano, the world’s cheapest car, is expected to roll off assembly lines later this year. It will sell for 100,000 rupees, or about $2,500, but analysts estimate customers could pay 20 percent to 30 percent more to cover taxes, delivery and other charges.

SHANGHAI, China, Jan. 20--As China gradually relaxes its controls on its currency, few stand to lose as much as Wu Xiao, a Shanghai black market money changer who may soon be out of a job.
For more than a decade, the Chinese yuan was pegged artificially low against the dollar, resulting in the kind of spread between the official and the market-driven rate that underground traders thrive on. Life was good for Wu, AFP wrote.
But since China revalued the yuan in 2005, leading to a cumulative appreciation against the dollar of about 14 percent so far, the spread has narrowed dramatically, and Wu’s margins have plunged.
“If the US dollar keeps depreciating then there’s nothing we can do. The only way for us to make money is to buy and sell quickly. It’s now always safer to have your money in yuan,“ said Wu.
The change in the exchange rate in January is equivalent to about a 16-percent hike on a yearly basis, and analysts have begun to forecast that yuan could gain as much as 9 percent by the end of the year.
China’s booming economy has long benefited from a currency that Beijing’s trade partners blame for global commercial imbalances, as cheap Chinese exports have soared while more expensive imports have failed to keep pace.
As inflation has picked up pace--hitting an alarming 11-year high in November--regulators are beginning to worry that too much money in the financial system is a main factor behind economic overheating.
“Beijing is becoming ever more concerned about domestic inflation--and the argument that an undervalued exchange rate is at the root of excess liquidity has won increasing numbers of converts,“ said Stephen Green, an economist at Standard Chartered in Shanghai.
“The idea has to be that the Chinese yuan appreciation will cool some of the upstream energy and raw material inflation pressure and cool export-related investment,“ said Green, who estimated the yuan will rise nine percent in 2008.
The good news for the Chinese consumer is that a stronger currency means greater purchasing power to buy imports. But faster currency appreciation spells trouble for China-based exporters, which have to conduct the majority of their trade in dollars.

A man symbolically treads down a cell phone of Finnish mobile phone manufacturer Nokia during a protest in front of the company's plant in Bochum, western Germany on Jan. 16.

Bochum, Germany, Jan. 20--Anger in Germany against mobile phone giant Nokia for closing a factory grew on Saturday with the head of one of the parties in the governing coalition joining the calls for a boycott.
“As far as I am concerned there will be no Nokia mobile phone in my house,“ said Kurt Beck, head of the left-wing Social Democrats (SPD), coalition partners with Chancellor Angela Merkel’s Christian Democratic Union (CDU), AFP reported.
“It is not my style to call for a boycott of a product. But for me, and this is doubtless the case with many other Germans, the name of Nokia has not sounded good for the past week,“ Beck told the mass circulation Bild am Sonntag in an interview on Sunday. “I don’t want to be reminded of the incredible source of anger every time I’m on the phone,“ he added.
Finland-based Nokia, the world’s largest maker of mobile phones, plans to close its factory in Bochum in western Germany with the loss of 2,300 jobs in order to shift production to Romania where costs are lower.
The planned closure has sparked resentment in Germany, with the country’s DGB trade unions federation calling on Thursday for a nationwide boycott.
Horst Seehofer, agriculture and consumer protection minister, has said he might ban Nokia phones in his ministry and Peter Struck, head of the SPD in parliament, said he has returned his phone.
Both the SPD and CDU are currently attempting to differentiate their policy positions ahead of key state elections in the states of Hesse and Lower Saxony on Jan. 27, followed by a third in the city state of Hamburg.

WARSAW, Poland, Jan. 20--Russia has lifted its embargo on Polish plant products, ending a long-running dispute that was blocking a new EU-Russia agreement, Poland’s agriculture ministry said on Saturday.
“An agreement was signed late on Friday by the Russian and Polish agriculture ministers ... at the Berlin agricultural fair,“ spokeswoman Malgorzata Ksiazek was quoted by news agency PAP as saying, AFP wrote.
Last month Russia lifted an embargo on Polish meat that had been imposed in 2005 amid frosty relations between Moscow and the government of right-wing former Polish prime minister Jaroslaw Kaczynski.
New Prime Minister Donald Tusk has made a point of improving Poland’s foreign relations, especially with Germany and Russia, since defeating Kaczynski in elections in October.
“It is an important step in relations between the two countries. The success will be completed when Russia and the European Commission reach an agreement on food security. When that happens, the Russian market will be open to all Polish plant products,“ the spokeswoman said.
Tusk, who is due to visit Moscow on Feb. 8, has let it be known that he is prepared to lift EU member Poland’s veto on a new agreement between Russia and the European Union focused largely on energy cooperation.
Poland’s new Foreign Minister Radoslaw Sikorski is due to visit Moscow next week.

TOKYO, Jan. 20--Japan will provide technological support for developing countries in Africa and Asia to help them fight against climate change and infection diseases, AFP reported.
Japan will unveil the program when it hosts this year’s Group of Eight (G8) summit in Toyako, a lakeside resort on the northern island of Hokkaido, from July 7 to 9, Yomiuri Shimbun newspaper said.
Under the plan, Japan will help countries in Africa and Asia “cultivate environmental leaders“ in charge of taking measures to protect the environment from water pollution and global warming, the mass-circulation daily said.
Japan also will take the lead in a technological study with developing countries on effective measures to reduce greenhouse gas emissions and combat infections, Yomiuri said.
In a New Year statement, Prime Minister Yasuo Fukuda vowed that Japan would “lead the worldwide discussions in order to hand over clean skies to our children.“
Apart from Japan, the G8 is made up of Britain, Canada, France, Germany, Italy, Russia and the United States.
The world’s second biggest economy after the United States, Japan is the home of the Kyoto Protocol, the landmark 1997 treaty that mandated cuts in greenhouse gas emissions heating up the planet.

BERLIN, Jan. 20--German farmers attending a week-long agricultural fair--dubbed Green Week--are divided on their level of responsibility for the environment and the best methods to fight global warming.
The image of a farmer in harmony with nature has long prevented a hard look at the sector’s contribution to climate change, notably when farming is compared with much more visibly polluting activities such as the chemical and steel industries and their iconic smokestacks, AFP wrote on Saturday.
“We are still the most inoffensive sector, and still the only ones to produce oxygen,“ said Gerd Sonnleitner, president of the German farmers federation.
But in light of methane produced by flatulent cattle, nitrates used in fertilizers and other substances containing ammonium and carbon dioxide, the sector is far from pure.
In the European Union, agriculture is responsible for 10 percent of greenhouse emissions, according to the statistics service Eurostat, half of which comes from cattle raising.
Each milk cow emits 100 kilos (220 pounds) of methane per year through its digestive process.
European Agriculture Commissioner Mariann Fischer Boel is considering the inclusion of climate change targets as part of qualifications for subsidies under a new common agricultural policy.