Oil prices, which have soared five-fold since 2003, posted their highest ever one-day gain of $10.75 to close at a new record of $138.54 in New York after threatening remarks by an Israeli official on oil producer Iran.
The United States and Asia’s four largest powers voiced concern on Saturday after a record spike in oil price as worries grew that energy costs may derail the global economy, AFP reported.

Oil prices posted their highest ever one-day gain of $10.75 to close at a new record of $138.54 in New York.

US Energy Secretary Samuel Bodman said that the record oil prices were “a shock“ and warned oil producers that it would do them no good if the US economy took a hit.
“It’s not good for producing nations to see the US struggling economically (as) they depend on us to be a significant engine in world economic activity,“ Bodman told reporters ahead of the talks in Aomori, Japan.
Bodman held talks with energy ministers from China, Japan and South Korea about the energy markets. India’s oil minister cancelled at the last minute and was replaced by New Delhi’s ambassador to Tokyo.
Their talks will be followed Sunday by a meeting of the energy ministers of the Group of Eight industrial powers here in Aomori, a hub of Japan’s nuclear energy industry 600 kilometers (370 miles) north of Tokyo.
Japan’s energy minister Akira Amari, the chair of the meeting, said that the meeting should send a signal about oil prices. “This has become a major risk factor for the world economy,“ Amari said. “It is very important that we, the five nations that consume half of the world energy, get together and issue a united message on what action we should take,“ he said.

Abnormally High
Meeting with South Korea’s Knowledge Economy Minister Lee Youn-Ho, Amari said that he believed crude oil prices were “abnormally high“. “We want to issue a message on this to the world,“ Amari said.
Lee added, “I don’t think the oil prices are at normal levels either. It is fairly questionable whether the world economy will be able to develop further at this level of crude oil prices.“
Japan, the world’s second largest economy, is nearly entirely dependent on imports for its oil and gas. Its fishing industry recently said the situation had become so severe it was considering a strike this summer.

India Raises Fuel Price
India’s government on Wednesday hiked fuel prices after its state-run oil companies said they had been hit hard by the soaring global prices while having to sell fuels at heavily discounted prices. The decision triggered angry protests and strikes.
Soaring oil prices have been blamed on a variety of factors including turbulence in the Middle East and rising consumption by emerging economies such as China and India.
Analysts said the sharp spike overnight was a reaction to reported remarks by Israeli Deputy Prime Minister Shaul Mofaz on Iran, a major oil producer.
Mofaz warned that Israel would attack Iran if it continued its alleged nuclear weapons drive, although he stressed such an operation could only be conducted with US support.
Despite the spike, Bodman said he did not see oil prices as a “crisis“ and denied the need for tighter regulations of oil markets.
Climate change will also be on the agenda for the 11 countries, which together release 65 percent of the carbon dioxide emissions blamed for global warming.
The climate will be a major issue when the leaders of the G8 hold a summit from July 7 to 9 in Japan’s northern resort of Toyako.
The International Energy Agency said in a report Friday that no single form of energy or technology could solve the problem alone, calling for increased use of carbon dioxide capture and storage, renewable and nuclear energy and better energy efficiency.

The world needs to invest $45 trillion in energy in coming decades, build some 1,400 nuclear power plants and vastly expand wind power in order to halve greenhouse gas emissions by 2050, according to an energy study, AP wrote.
The report by the Paris-based International Energy Agency envisions an “energy revolution“ that would greatly reduce the world’s dependence on fossil fuels while maintaining steady economic growth.
“Meeting this target of 50 percent cut in emissions represents a formidable challenge, and we would require immediate policy action and technological transition on an unprecedented scale,“ IEA Executive Director Nobuo Tanaka said.
A UN-network of scientists concluded last year that emissions have to be cut by at least half by 2050 to avoid an increase in world temperatures of between 3.6 and 4.2 degrees above pre-18th century levels.

The Group of 20 developing countries are not stalling the world trade liberalization talks, but have put forward proposals to allow negotiations to continue, Brazilian foreign minister Celso Amorim was quoted by AFP as saying.
“I think there is no basis whatsoever for that kind of accusation,“ Amorim pointed out at the end of a meeting with the European Union Troika in the Brdo pri Kranju castle, just outside Ljubljana, Slovenia. He added “if it were not for Brazil and the G20 the (Doha) round would have collapsed long ago.“
The World Trade Organization’s Doha round of talks to reduce trade barriers was launched in the Qatari capital in November 2001 with the aim of reaching a deal by 2004. It has foundered ever since, mainly over disputes between developed and developing countries on agricultural subsidies and industrial tariffs.
Director-General Pascal Lamy had initially hoped to bring ministers to Geneva over Easter to decide on “modalities“--the key numbers for tariff cuts that would form the basis for any comprehensive deal.

The US lost jobs for a fifth month and the unemployment rate rose by the most in more than two decades, as an influx of students into the workforce drove the biggest jump in teenage joblessness since at least 1948.
Payrolls fell by 49,000 in May, the Labor Department said in Washington. The jobless rate increased by half a point to 5.5 percent, higher than every forecast in a BBC News survey. The surge in youth unemployment exacerbated the increase in joblessness, as every category except Hispanics showed a gain.
Factories, builders and retailers axed workers last month; UAL Corp.’s United Airlines, truck-engine maker Cummins Inc. and bookseller Borders Group Inc. are among those announcing cuts this week as businesses try to survive the slowdown. Treasuries rose while stocks and the dollar slid after the report.

European Central Bank President Jean-Claude Trichet is leading the way as the world’s most powerful monetary-policy makers turn their attention from protecting economic growth to fighting inflation.
Trichet said the ECB may raise interest rates as soon as next month, two days after Federal Reserve Chairman Ben S. Bernanke indicated he’s finished cutting for now. A near doubling in the price of oil in a year and record food costs are forcing central bankers to look beyond weaker consumer spending and focus more on restraining inflation expectations, Bloomberg wrote.
Officials are stepping back from the crisis mode that’s characterized policy since August as central banks fought the credit crunch with a combination of rate cuts and billions of dollars in extraordinary loans to banks. The Fed, Bank of England and Bank of Canada pared borrowing costs, while the ECB interrupted its tightening.
“The joint message from central bankers is that interest rates are likely to hold at current rates or go higher,“ said Vincent Reinhart, a former Fed economist. While the ECB left its key interest rate at 4 percent, Trichet surprised investors by saying that a rate increase next month is not excluded.