Top energy officials from the world’s biggest consumer nations meet on Saturday to discuss how to tackle surging oil, coal and natural gas prices that pose a growing threat to global economic growth.
The two-day meeting of Group of Eight energy ministers plus officials from China, India and South Korea comes amid unprecedented volatility in the oil market and growing public discontent over their governments’ failure to soften the blow.
Oil prices surged by their biggest real one-day gain ever on Friday, rocketing over $10 to a new record high above $139 a barrel, taking this year’s gains to 44 percent.
That jump doubled the previous one-day record, set just the day before, and extends a six-year bull run that has seen prices rise sevenfold since 2001 as investors and speculators see producers struggling to keep pace with booming demand.
Ahead of the full G8 plus three gathering on Sunday, representatives from the United States and Japan, plus non-G8 South Korea, China and India, will meet in Aomori, northern Japan, on Saturday, with energy conservation at the top of the agenda.
They also aim to press oil suppliers to work harder to show that they have the resources to meet long-term demand, hoping such a message may temper investor enthusiasm for oil markets built partly on the belief that world production may soon peak.
Members of the Organization of the Petroleum Exporting Countries (OPEC) have regularly rejected calls to pump more crude now, saying the market is well supplied, and said they stand ready to drill more fields if they can be assured of demand.
This is the second meeting of the five nations following a similar gathering in December 2006 in Beijing, which failed to produce any definitive action.
Members of the International Energy Agency (IEA), the energy advisor to 27 industrialized countries, will also urge China and India to join a framework to cooperate on managing strategic oil reserves and controlling demand in times of energy crises.
Record oil prices have triggered protests across Europe, pushed airlines into the red and forced five Asian countries to cut fuel subsidies, intensifying price pressures.
World leaders are fighting an inflation battle on two flanks, having met earlier this week to seek a solution to the surge in food commodity prices that threatens starvation for millions.
On Sunday, energy ministers of the G8 nations will hold talks together with representatives from South Korea, China and India.
The meetings in Aomori will set the stage for the G8 leaders’ summit to be held on Japan’s northernmost island of Hokkaido July 7-9, where Tokyo is expected to press for a commitment to slash greenhouse gas emissions by 2050.
In a report on Friday, the IEA said world governments must quickly start a $45 trillion “energy technology revolution” to build dozens of nuclear power plants, thousands of wind turbines and billion-dollar carbon-capture plants that could drive up the cost of producing carbon ten-fold in order to halve emissions.
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