German official: high oil costs no threat

1st June 2004, Comments 0 comments

1 June 2004 , BERLIN - Leaders of G8 industrial nations who are holding their annual summit next week have few means to influence surging oil prices which, in any case, do not pose a threat to economic growth, senior German officials said Tuesday. "This is a market process which does not react to political declarations," said an official speaking on the condition of anonymity, adding: "Oil prices are not a political weapon." The official stressed higher crude oil prices were already figured into most econo

1 June 2004

BERLIN - Leaders of G8 industrial nations who are holding their annual summit next week have few means to influence surging oil prices which, in any case, do not pose a threat to economic growth, senior German officials said Tuesday.

"This is a market process which does not react to political declarations," said an official speaking on the condition of anonymity, adding: "Oil prices are not a political weapon."

The official stressed higher crude oil prices were already figured into most economic projections and there was no evidence that global growth would slow down this year in any of the Group of Eight (G8) states.

This contradicts Axel Weber, the new German Bundesbank chief and European Central Bank governing council member, who last week warned high oil prices were acting as a brake on the upswing in the 12-member eurozone.

Oil prices last month briefly crossed the crucial USD 40 a barrel price.

Leaders of G8 states Britain, Canada, France, Germany, Italy, Japan, Russia and the United States will meet at Sea Island, Georgia in the southeast US from 8 to 10 June.

German officials said higher oil prices were due to a host of reasons beyond the G8's control including:

- 1) The global economic upswing which had boosted overall demand for oil.

- 2) Growing demand for oil from China whose share of annual world crude oil consumption has risen to 8 per cent from 4 per cent.

- 3) Higher oil refinery capacity.

- 4) Fears of terrorist attacks in Mideast oil producing states.

The best way for the G8 to react to rising oil prices was was a triple response of pushing for greater energy efficiency; more use of renewable energy; and boosting the search for new oil fields, the officials said.

DPA

Subject: German news 

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