The threat of an oil price shock destabilizing a global economic recovery overshadows a meeting this weekend of G7 financial leaders.
"The subject of oil will certainly come up in our overview of the macroeconomic forces that are affecting the world economy," US Secretary of the Treasury John Snow told reporters here.
"Higher oil prices are not helpful from the point of view of the agenda for growth. They act like a tax, reducing the disposable income that is available for other purposes," he said.
Snow hosts a gathering in New York this weekend of finance ministers from the G7 -- Britain, Canada, France, Germany, Italy, Japan and the US -- at a time of soaring energy prices.
World oil prices neared record highs Wednesday amid bloodshed in the Middle East and US President George W. Bush's repeated refusal to release emergency oil reserves.
New York's benchmark light sweet crude for June delivery soared US$0.96 to US$41.50 a barrel, US$0.05 shy of the record close set Monday for the 21-year-old futures contract.
Gasoline roared US$0.634 higher to a record close of US$1.4503 for a gallon of regular unleaded to be delivered in June.
"This is a real, live, honest-to-God bull market," said AG Edwards director of futures research Bill O'Grady.
"If this market is going to go down, it is going to happen because of a change in psychology," he said.
Traders said oil was supported by Bush, who repeated his policy of refusing to release oil from an emergency reserve to lower record gasoline prices, saying it would weaken the country in its "war on terror."
Adjusted for inflation, oil prices remain far below the peaks set before the 1991 Gulf War. Analysts generally believe they would have to rise much further to actually interrupt the world recovery.
Analysts say the possibility of much higher prices cannot be discounted if an attack in the Middle East were to interrupt supply from a major exporter such as Saudi Arabia.
"The major concern might be a serious disruption to the supply of crude oil from the Middle East that could do considerable damage to the world economy. That is going to be one of their primary con-cerns, I would think," said John Lonski, Moody's Investors Service chief US economist.
"That is perhaps the biggest danger facing the global economy [in the] near term," he said.
Oil prices could fall, however, if confidence returned in Middle East security.
"If it turns out that there are developments that diminish that perceived risk of supply disruptions, then we will probably see crude oil prices subside quickly," Lonski said.
Wachovia Securities global economist Jay Bryson agreed that oil would dominate the G7 meeting in New York.
"The major concern is probably going to be the price of oil, what effect is that going to have on the global recovery if oil prices stay at these sorts of levels or even go higher," Bryson said.
Industrialized powers likely would ponder how to cut oil prices, either by encouraging more output from oil producers or possibly by examining ways to lower consumption, he said.
AGING: As of last month, people aged 65 or older accounted for 20.06 percent of the total population and the number of couples who got married fell by 18,685 from 2024 Taiwan has surpassed South Korea as the country least willing to have children, with an annual crude birthrate of 4.62 per 1,000 people, Ministry of the Interior data showed yesterday. The nation was previously ranked the second-lowest country in terms of total fertility rate, or the average number of children a woman has in her lifetime. However, South Korea’s fertility rate began to recover from 2023, with total fertility rate rising from 0.72 and estimated to reach 0.82 to 0.85 by last year, and the crude birthrate projected at 6.7 per 1,000 people. Japan’s crude birthrate was projected to fall below six,
US President Donald Trump in an interview with the New York Times published on Thursday said that “it’s up to” Chinese President Xi Jinping (習近平) what China does on Taiwan, but that he would be “very unhappy” with a change in the “status quo.” “He [Xi] considers it to be a part of China, and that’s up to him what he’s going to be doing, but I’ve expressed to him that I would be very unhappy if he did that, and I don’t think he’ll do that. I hope he doesn’t do that,” Trump said. Trump made the comments in the context
SELF-DEFENSE: Tokyo has accelerated its spending goal and its defense minister said the nation needs to discuss whether it should develop nuclear-powered submarines China is ramping up objections to what it sees as Japan’s desire to acquire nuclear weapons, despite Tokyo’s longstanding renunciation of such arms, deepening another fissure in the two neighbors’ increasingly tense ties. In what appears to be a concerted effort, China’s foreign and defense ministries issued statements on Thursday condemning alleged remilitarism efforts by Tokyo. The remarks came as two of the country’s top think tanks jointly issued a 29-page report framing actions by “right-wing forces” in Japan as posing a “serious threat” to world peace. While that report did not define “right-wing forces,” the Chinese Ministry of Foreign Affairs was
PREPAREDNESS: Given the difficulty of importing ammunition during wartime, the Ministry of National Defense said it would prioritize ‘coproduction’ partnerships A newly formed unit of the Marine Corps tasked with land-based security operations has recently replaced its aging, domestically produced rifles with more advanced, US-made M4A1 rifles, a source said yesterday. The unnamed source familiar with the matter said the First Security Battalion of the Marine Corps’ Air Defense and Base Guard Group has replaced its older T65K2 rifles, which have been in service since the late 1980s, with the newly received M4A1s. The source did not say exactly when the upgrade took place or how many M4A1s were issued to the battalion. The confirmation came after Chinese-language media reported
RSS