Ministers seek ways to handle oil prices

Ministers seek ways to handle oil prices

MANCHESTER, England: EU finance ministers will debate measures on Saturday to deal with soaring oil prices and their effect on fragile economic growth.

The Czech government wants to get more oil flowing and has said it will urge the EU to pressure the Organization of Petroleum Exporting Countries to increase oil production. OPEC, which next meets Sept. 19, has said its production surpasses demand, and that will eventually bring down prices.

On Friday, ministers warned that oil prices will eat into euro-zone growth this year, but said the region has become more resilient to such shocks and leaders agreed that unilateral energy tax cuts were not a solution.

Luxembourg Prime Minister Jean-Claude Juncker said high oil prices will cut euro-zone growth to 1.1 percent to 1.3 percent this year, well down from the European Commission's previous forecast of 1.6 percent.

Juncker said the growth estimate was based on average oil prices around US$67 a barrel in the fourth quarter of 2005 and in 2006. Oil was trading around $65 a barrel on Friday, down from its high above $70 a barrel but almost 50 percent higher than a year ago. -- AP