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Gordon Brown' weighs in on petrol crisis

Latest update : 2008-06-01

Like the rest of Europe, Britain is enduring the fallout from soaring fuel prices. PM Gordon Brown has encouraged producers to increase production while trying to maintain a green tax, inciting protests. (Story: P. Hall)

World oil prices retreated but stayed above 130 dollars in Asian trade on Thursday amid growing jitters about falling US gasoline consumption spooked by skyrocketing pump prices, dealers said.
  
New York's main oil futures contract, light sweet crude for July delivery, fell 44 cents to 130.59 dollars per barrel.
  
The benchmark contract shot up 2.18 dollars to close at 131.03 dollars on Wednesday at the New York Mercantile Exchange.
  
London's Brent North Sea crude for July delivery slid 80 cents to 130.13 dollars a barrel, after settling at 130.93 dollars on Thursday. The contract had rallied 2.62 dollars at the close.
  
Values struck records above 135 dollars late last week.
  
Tony Nunan, of Mitsubishi Corp's international petroleum business in Tokyo, said the retreat was due to "regular volatility", sparked by news of lower gasoline demand in the US, the world's largest oil-consuming nation.
  
"Oil prices are getting to levels where they are starting to affect demand negatively," he said.
  
Traders were looking ahead to the weekly report on US energy stockpiles due later Thursday, after a public holiday in the United States on Monday.
  
British Prime Minister Gordon Brown on Wednesday warned that the world was facing a "great oil shock" that requires a comprehensive international strategy to address.
  
The British leader's warning came a day after French President Nicolas Sarkozy urged a Europe-wide cut in consumer taxes on fuel as fears of rising energy costs spark unease around the world.
  
The price of oil on international markets has surged by about a third since the start of 2008 and compares with 50 dollars per barrel 18 months ago.
  
A top economic adviser to US President George W. Bush warned that rising oil prices could further crimp economic growth in the US.
  
"I think the high price of oil has already cost us a significant amount in terms of economic growth," said Edward Lazear, chairman of the Council of Economic Advisers.
  
Lazear said red-hot oil prices would continue to dent economic growth unless something is done about the runaway values.
  
Analysts said increased speculative trading in the oil markets has been driven by tight global supplies and a weaker dollar, which makes commodities priced in the US currency cheaper for buyers armed with stronger currencies.
  
Surging oil prices have also been underpinned by growing demand in China and other emerging economies, as well as unrest in crude-producing countries, particularly Nigeria, and OPEC's reluctance to hike output, analysts said.
  
The Organisation of the Petroleum Exporting Countries (OPEC), which pumps 40 percent of the world's oil, has proven reluctant to bend to US-led demands for it to pump more crude to help cool prices.
  

Date created : 2008-05-29

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