The weak US dollar and sky high oil prices took centre stage at the meeting of G8 finance ministers meeting in Osaka, Japan. The ministers from the world’s eight major industrialised countries grappled with the problems of surging inflation and the impact of spiralling oil prices on a slowing global economy.
Crude oil made history a week ago when it recorded a 10 dollar increase in one day reaching 139 dollars a barrel.
The G8, mostly major importers of crude, wields little influence over oil markets. Much of the recent demand has been driven by emerging economies, among them China and India.
The US is by far the world’s biggest consumer of oil needing 21 million barrels a day. Japan consumes 5 million barrels and Germany uses 2 point 3 million barrels daily.
The slide in the value of the US currency has prompted investors to buy oil futures and other commodities to hedge their dollar risks.
Officials said earlier the talks would focus on commodities and inflation but French Economy Minister Christine Legarde said the issues are inextricably tied to the dollar.