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G8 calls for oil output boost to ease economic threats AFP OSAKA (AFP) — World finance chiefs warned on Saturday runaway oil prices could imperil global economic growth, calling on producers to open up the taps and tasking the IMF to investigate wild market swings. The weakness of the dollar and the role of speculators in the latest oil shock were also in the spotlight during two days of talks here between finance ministers from the Group of Eight major industrialised nations. High oil and food prices pose "a serious challenge to stable growth worldwide" and may worsen poverty and stoke global inflation, the G8 said in a statement . US Treasury Secretary Henry Paulson said soaring energy costs were "a heavy burden" on the world's largest economy.
(Article continues below) "It brings with it the risk that this slowdown in our economy is going to be prolonged," he said. The G8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- urged oil producing countries to hike production and to invest money to ensure they can pump out enough supply in the future. They asked the International Monetary Fund to lead a probe into the recent spike in crude oil prices, amid signs of discord about whether action should be taken to curb investment flows into commodity markets. Italy's Economy Minister Giulio Tremonti argued that surging oil prices were essentially due to speculation and said the G8 should deter such activity by forcing investors to pay higher deposits to play the commodity markets. But Paulson insisted speculators should not be blamed for the fivefold jump in oil prices since 2003. "All the evidence points to supply and demand," as the main cause, he said. "I think there's a danger that if people say 'all this is speculators' then we won't do what we need to do. We don't want to misdiagnose the problem." Other ministers said it was too hard to gauge the influence of investors. "No one really knows the truth," admitted Japanese Finance Minister Fukushiro Nukaga. World oil prices have been on a rollercoaster ride recently, soaring close to 140 dollars a barrel, but analysts said the G8 remarks might help to cool energy markets. Their comments "may be a trigger for oil prices to peak," said Toshihiro Matsuno, head of research at SMBC Friend Securities in Tokyo. "Their common recognition of inflation (risks) may spread through markets and it would be hard to see players continuing to buy oil in that situation."
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