High “Black Gold” Prices; Buck: 2009 I’ll Be Back

Incredibly high oil prices have taken their toll on economy and even energy producers have become anxious, but at talks with their customers in Rome they blamed the dollar and said they could not restrain the process.

Speaking after oil hit yet another record above $117 a barrel yesterday, the International Monetary Fund's John Lipsky told Reuters the price was one of many factors eating into economic growth. "It's dampening growth - that's for sure, but of course it is benefiting exporters."

Lipsky, the No. 2 official at global watchdog the IMF, was arriving for talks between energy producers and consumers that continue till today.

Representatives of both sides have said the risk is prices will go higher still and although the United States has led calls for more oil to calm markets, Opec oil ministers have repeatedly said that would make no difference.

They say the problem is nothing to do with short-term supply. Rather, it is a result of a weak dollar that has hit record lows against major currencies in response to a faltering US economy.

"We think the price that we are seeing is a consequence of the devaluation of the dollar," Venezuelan Energy and Mines Minister Rafael Ramirez told Reuters. "The devaluation has caused terrible consequences for the world economy and for food prices."

It has predicted the US economy would enter a modest recession in 2008 and start gradually to recover in 2009. Growth expectations were based on assumptions of an oil price of $95.50 for 2008 and $94.50 in 2009, well below the record of $117.40 for US crude hit yesterday. Financial markets have been in turmoil for months in a crisis triggered by US bad debt and a sliding housing market.