"Unjustifiably" high oil prices may risk economic recovery: Malaysian PM

18:56, June 07, 2010      

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Malaysian Prime Minister Najib Razak stressed here on Monday that unjustifiably-high oil prices would risk jeopardizing the fragile global economic recovery.

Hence, the relevant authorities should not let the fixation on what was an appropriate oil price level detract others from the more important task of ensuring that oil prices did not diverge from their underlying market and economic realities, said Najib.

Speaking at the 15th Annual Asia Oil and Gas Conference here, Najib said that proposals for greater oversight of financial markets aimed at preventing price manipulation should be welcomed if they lead to a more efficient and robust price formation.

"Since we met last June, we have seen oil prices edge steadily upwards to around 80 U.S. dollars a barrel. This strengthening has come about despite the fact that demand growth has been fairly modest.

"Undoubtedly, this apparent mismatch between prices and supply and demand fundamentals raises questions over whether oil markets have become overheated," said Najib.

In order to support global energy security, Najib said that Malaysia recognized the need to shift towards a low-carbon economy.

As a result, Malaysia was considering new investments in the four main sectors of energy, transport, buildings and water to implement green technologies, added Najib.

Meanwhile, Najib believed that governments should establish clear and coherent national energy policies that were grounded in economic realities and forward looking to help reduce variability in expectations of future demand growth.

Source: Xinhua


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