Third Oil Crisis

The global economy faces a one-two punch from slowing growth and soaring fuel and food prices, finance ministers from the world’s richest nations warned Saturday, though they stopped short of offering concrete solutions. Finance ministers from the Group of 8 industrialized nations wrapped up a two-day meeting in Japan that was dominated by talk of rising petroleum prices, which have set off street protests across the world. In a statement, the ministers said higher prices of oil and other commodities threatened the world economy at a time when it was still reeling from the collapse of the housing market in the United States. The ministers urged oil-rich nations to increase production to help reverse a trend that has pushed up oil prices to nearly $140 a barrel, a record. The ministers also warned that the rising cost of oil and other commodities could spur broader increases of prices and wages. The specter of fighting inflation as the ministers try to revive their flagging economies would “make our policy choices more complicated,” the statement said. The combination of inflation and low growth, known as stagflation, is difficult to escape because steps to spur economic activity, like lowering interest rates, can also lead to price increases. “For a long time, the world economy enjoyed a combination of robust growth and low inflation, but it now faces headwinds,” the statement said. “Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide.” … read this article

Saudi Arabia plans to increase its oil production by 200,000 barrels a day next month, the kingdom’s oil minister told U.N. chief Ban Ki-moon on Sunday, according to Ban’s spokesman.

The U.N. secretary-general met with Oil Minister Ali al-Naimi in the port city of Jiddah during a one-day trip to the world’s largest oil producer.

Farhan Haq, a spokesman who is traveling with Ban, said in an e-mail that the U.N. chief said al-Naimi told him Saudi Arabia would increase oil production by 200,000 barrels a day from June to July. In May, the kingdom increased its production by 300,000.

By July, production should be at 9.7 million barrels a day, Haq said.

Ban also said Saudi Arabia understands that the current price of oil, which topped $139 per barrel earlier this month, is not normal, according to the official Saudi Press Agency… read this article

Sen. Barack Obama told voters in Wayne, Pennsylvania, on Saturday that he’ll cut taxes for the middle class, raise taxes for the wealthy and pour more money into what he calls green energy.

Later Saturday, in Illinois, Obama helped fill sandbags near the Mississippi River in an area devastated by flooding, his campaign said. The same day, Sen. John McCain extended his sympathies to those affected by flooding in the Midwest.

According to his campaign, Obama wants to invest $150 billion over the next 10 years to establish a green energy sector; create a national low-carbon fuel standard to ensure that the fuel is more efficient, and invest in clean energies like solar, wind and biodiesel.

That, according to the campaign, would create up to 5 million new green energy jobs … read this article

This is a rush transcript of “Special Report With Brit Hume” from June 11, 2008. This copy may not be in its final form and may be updated.

BRIT HUME, HOST: And so Jim Johnson steps aside as the chairman, I guess you’d say, or at least a senior member of the vetting team for Barack Obama’s vice presidential search.

The Obama campaign put out a statement that said “Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee. So he has made a decision to step aside that I accept.” That’s from Barack Obama.

John McCain’s campaign responded in a statement from Tucker Bounds, “The American people have reason to question the judgment of a candidate who has shown he will only make the right call when under pressure from the news media. America can’t afford a president who flip-flops on key questions in the course of 24 hours.”

Jim Johnson later today put out a statement himself. “I would not dream,” he said, “of being a party to distracting attention from this historic effort,” meaning Obama’s, “and therefore I withdraw from the v.p. selection process. This withdrawal should in no way imply that I accept the blatantly false statements and misrepresentations that have been written about me in recent days,” end quote, Jim Johnson from today … read this article

There have been a number of newspaper articles saying that some Republicans are going to go negative on Michelle Obama during the upcoming campaign.

“Talking Points” believes that would be disastrous for the GOP if it happens, and FOX News political guy Frank Luntz agrees with me. That’s because independent voters will decide who will be the next president, and many non-ideological people do not feel comfortable watching a candidate’s wife get hammered, unless there is some kind of smoking gun — a large smoking gun.

The rap against Mrs. Obama is that she is angry with America, and her “proud” quote was widely discussed. That’s fine. She has issued a clarification. You either believe her or you don’t.

According to Rasmussen, 42 percent of Americans have a negative opinion of Mrs. Obama. Again, that’s legitimate. All Americans are entitled to their opinions. But to make her a focal point of the campaign will anger many, perhaps most Americans.

Think about it. The reason the far left hasn’t been able to win anything is that they are so hateful. Their recent attacks on Hillary Clinton demonstrated once and for all what kind of people the far-left loons are — vile people. Just go to the Daily Kos or The Huffington Post and check it out … read this article

Runaway oil prices will be a focus of finance ministers from the Group of Eight industrialized nations meeting this week in Japan who are hoping to calm global jitters about a series of looming economic problems.

Soaring crude oil costs and rising food prices have created inflationary risks not seen in years.

Add to that the credit crunch still dragging on global growth and rattling international markets as well as persistent worries about a U.S. economic slump, and finance ministers have a long list of worries to address when they gather Friday for the two-day meeting in Osaka, hosted by a nation that imports nearly all its oil.

Japanese Finance Minister Fukushiro Nukaga recently told reporters he wanted a “serious discussion” of global economic development, environmental changes, African development, crude oil problems and rising food and commodities prices.

Nukaga also expressed concern about Japan’s economy, the world’s second-biggest, which he acknowledged was in a lull, with business investment and consumer spending stagnant and exports slowing because of a slump in the U.S., a key export market.

“I’m hoping for serious debates about what the G-8 will do, both individually and collectively, to solve those problems,” he said about the meeting that will bring together finance ministers from the U.S., Japan, Russia, Germany, France, Britain, Italy and Canada … read this article

A man accused of being part of a plot to blow up passenger planes in 2006 has admitted he considered targeting oil refineries as a “publicity stunt”.

Assad Sarwar, 28, said he and co-accused Abdulla Ahmed Ali, 27, had wanted to set off a small device as a political stunt against Western policy.

But under cross-examination, he said they had considered a “larger device” at gas terminals and oil refineries.

Eight men deny conspiring to murder and endanger aircraft leaving the UK.

Their arrests in August that year led to a ban on passengers carrying most liquids on board aircraft.

Prosecutors allege the men planned to make hydrogen peroxide bombs disguised as soft drinks to detonate in mid-air on at least seven planes flying out of London’s Heathrow airpor … read this article

China has seen its trade surplus fall 10% in May from a year earlier after a surge in the cost of imported energy and other raw materials, figures show.

The trade surplus was $20.2bn (£10.3bn) compared with $22.45bn a year earlier, after imports rose by a more than expected 40% year-on-year to $100.3bn.

But exports also beat forecasts, showing how resilient the economy was despite a US slowdown, analysts said … read this article

Oil prices have leaped amid concerns that demand will outstrip supply, taking crude near record highs.

New York light, sweet crude jumped $5.49 to $136.80 a barrel, adding as much as $7 earlier. London Brent rose $4 to $135.02, erasing higher gains.

Analysts said a sharp decline in US stocks spooked the market. A report from oil firm BP saying production had fallen also boosted prices.

Last week, oil hit a record of above $139, and higher prices are forecast.

Analysts have predicted that oil prices could power past the $200 mark in 18 months.

They have soared 40% this year, causing protests across Europe and Asia at the subsequent higher fuel prices and increases in the cost of living … read this article

Gasoline prices should peak at $4.15 a gallon this summer, the government says _ finally an encouraging word for motorists who might be thinking the cost of a fill-up will just keep climbing.

But wait: The predicted relief is pretty modest. Prices at the pump are likely to stay around $4 a gallon much of next year, according to Wednesday’s projections by the Energy Department’s statistical agency.

Oh, and the government tends to err on the optimistic side.

Guy Caruso, head of the federal Energy Information Administration, delivered the sober news at a congressional hearing on energy prices and the future of oil.

Even as he spoke, oil prices jumped again, edging for a time above $138 a barrel and putting yet more upward pressure on gasoline prices. By the end of the day the market seemed ready to set new records above $140 a barrel.

A drop in gasoline inventories, concerns about hurricanes that could disrupt Gulf of Mexico supplies, and most important the high oil prices all have contributed to a belief that the upward spiral of gasoline costs will continue at least for a few months, according to Caruso as well as private energy experts.