Oil prices topping $130 a barrel may slow global economic growth, Japan's trade minister said today, urging the world's biggest energy consumers to cut back on demand.
"Assuring energy security is now the top priority of all countries," Japan's Trade Minister Akira Amari said today at the opening of a meeting of energy ministers from the Group of Eight industrialized nations, plus China, India and South Korea, in Aomori, northern Japan.
Crude oil climbed more than $10 to $138.54 a barrel in New York on Friday prompting US Energy Secretary Samuel Bodman yesterday to describe the market as "shocking".
Rising oil prices may slow the global economy this year, which the World Bank forecast in January would expand at a more gradual pace of 3.3 per cent compared with 2007, citing a poor US outlook.
"US economic growth will probably fall below 1 per cent if oil stays at about $140 a barrel,'' Naka Matsuzawa, Chief Strategist at Nomura Securities Co in Tokyo, said by phone today.
"An economy recession in the US is highly likely to lead to a recession in other developed countries".
US Fed policy makers in April trimmed their economic growth projections for this year by about 1 percentage point to between 0.3 per cent and 1.2 per cent.
Advancing oil prices "will add to the downward pressure on global growth", the International Monetary Fund's First Deputy Managing Director John Lipsky said in a Bloomberg interview on the sidelines of the International Economic Forum in St. Petersburg, Russia, yesterday.
Bloomberg