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G7 ministers urge output boost to rein in oil prices

Finance ministers from the G7 nations yesterday urged world oil producers to boost their output to rein in soaring crude prices, a draft statement said.

While high oil prices largely reflect rising world demand, "geopolitical concerns" are also a factor, the statement said.

"We encourage oil-producing countries to raise production, and reiterate the need to enhance refinery capacity and improve energy efficiency," it said.

World oil prices soared above US$100 at the start of the year, but they have since cooled on market worries that a US recession and slowing global economic growth could curb demand for energy.

On Friday, oil prices rose strongly on supply disruptions in Nigeria and amid expectations of colder weather in the US.

New York's main oil futures contract, light sweet crude for delivery next month closed up a hefty US$3.66 at US$91.77 per barrel. In London, Brent North Sea crude for delivery next month settled up US$3.43 at US$91.94.

The G7 ministers said they opposed measures to artificially lower domestic energy prices through tax breaks or subsidies, as this would raise gas emissions and distort the energy market.
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