Producers must up oil output: G8
The G-8 summit of developed economies on Tuesday adopted a joint statement and devoted a good part of it to the rising oil prices which “pose risks to the global economy”.
By ET Bureau |
SAPPORO: The G-8 summit of developed economies on Tuesday adopted a joint statement and devoted a good part of it to the rising oil prices which ���pose risks to the global economy���. The G-8, which is constituted by United States, Britain, France, Germany, Japan, Italy, Russia and Canada, took note of short term as well as long term solutions to deal with the risk of high oil prices.
The Group also requested the IMF and International Energy Agency (IEA) to jointly carry out further analysis of the real and financial factors behind the recent surge in oil and commodity prices, and their effect on the global economy. It appears the G-8 has partially heeded repeated pleas from oil consuming developing economies like India to look at the speculative aspects of the international oil market.
It has thus formally stressed the ���importance of energy markets which send undistorted price signals and are free from any political pressure���. This comes after many developing economies, including India, have expressed reservations about the failure of the international financial system to address the cause of speculative bubbles in the commodities market.
Prime Minister Manmohan Singh also talked about the failure of the existing institutions to explain volatile oil and commodity prices. The Prime Minister yesterday called for a new forum of oil producers and consumers to provide stability to the oil markets.
Quite coincidentally, the G-8 statement does address this issue and has proposed an energy forum to focus on new technologies and energy efficiency which could ���contribute to a new dialogue between the producers and consumers���. As a short term solution to the rising oil prices the G-8 has said production and refining capacities must be increased.
The G-8 has also said that a successful conclusion of an ambitious, balanced and comprehensive WTO Doha agreement was critical to economic growth and development. ���Given the crucial stage of the negotiations, we reiterate our determination to work as a matter of urgency towards a successful conclusion of the Doha round���, the statement said.
Overall, the G-8 remains positive about the long term resilience of the global economy. It noted that emerging markets are still growing strongly but downside risk for the global economy stills persists. Elevated food, oil and commodity prices still pose a serious challenge to stable growth worldwide. ���We are determined to continuously take appropriate actions, individually and collectively, to ensure stability of growth globally���, the statement said.
The Group also requested the IMF and International Energy Agency (IEA) to jointly carry out further analysis of the real and financial factors behind the recent surge in oil and commodity prices, and their effect on the global economy. It appears the G-8 has partially heeded repeated pleas from oil consuming developing economies like India to look at the speculative aspects of the international oil market.
It has thus formally stressed the ���importance of energy markets which send undistorted price signals and are free from any political pressure���. This comes after many developing economies, including India, have expressed reservations about the failure of the international financial system to address the cause of speculative bubbles in the commodities market.
Prime Minister Manmohan Singh also talked about the failure of the existing institutions to explain volatile oil and commodity prices. The Prime Minister yesterday called for a new forum of oil producers and consumers to provide stability to the oil markets.
Quite coincidentally, the G-8 statement does address this issue and has proposed an energy forum to focus on new technologies and energy efficiency which could ���contribute to a new dialogue between the producers and consumers���. As a short term solution to the rising oil prices the G-8 has said production and refining capacities must be increased.
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In the medium term, joint efforts are needed to enhance investments in upstream and downstream projects. The G-8 has also said that a successful conclusion of an ambitious, balanced and comprehensive WTO Doha agreement was critical to economic growth and development. ���Given the crucial stage of the negotiations, we reiterate our determination to work as a matter of urgency towards a successful conclusion of the Doha round���, the statement said.
Overall, the G-8 remains positive about the long term resilience of the global economy. It noted that emerging markets are still growing strongly but downside risk for the global economy stills persists. Elevated food, oil and commodity prices still pose a serious challenge to stable growth worldwide. ���We are determined to continuously take appropriate actions, individually and collectively, to ensure stability of growth globally���, the statement said.
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