The world's top finance officials on Friday asked oil-producing nations to step up output and agreed it was crucial to work out exactly why prices have soared to levels that threaten global growth.
"Oil prices are high and remain a risk," the Group of Seven finance ministers said in a closing communique after hours of talks during which US oil prices topped $50 a barrel.
"So first, we call on oil producers to provide adequate supplies to ensure that prices moderate," the communique said. "Second, it is important consumer nations increase energy efficiency."
G7 finance ministers made a similar call for higher production at a meeting in New York in May. Crude has climbed more than $10 since then and contributed to a slowing in growth in the United States and Japan in the second quarter.
The elite economic club - consisting of the United States, Britain, Canada, France, Germany, Italy and Japan - also on Friday pressed the International Energy Agency to improve "oil data transparency."
Effectively, the oil-consuming nations are asking the agency, set up during the 1974 oil crisis, to help sort out whether scarce oil supplies, speculation or raging demand is the main culprit behind a relentless upward march in prices.
Despite the obvious worry about energy costs, the G7 finance ministers and central bankers said economic prospects were promising.
The G7 ministers met ahead of weekend meetings of the International Monetary Fund and World Bank, where issues such as debt forgiveness for poor countries were expected to take on a higher profile.
ROSY GROWTH PREDICTIONS: The IMF's World Economic Outlook, issued earlier this week, foresaw the strongest performance for the global economy this year in three decades, predicting output will grow 5 percent.
But like the G7 ministers, the IMF warned lofty oil prices were a shadow on a largely sunny outlook.
The G7 dwelt on the positive, by and large, and said it would "return to the issue of medium-term energy demand and supply at our next meeting."
The United States has hosted all four of this year's G7 meetings. Two of these will switch to Britain in 2005 under a rotation through the wealthy nations.
"Global economic growth is strong and the outlook for 2005 remains favorable," the communique said. "Inflation and inflation expectations remain low in our economies."
The G7 ministers moved on from their formal meeting to a working dinner with Chinese officials - invited as special guests in recognition of the country's growing economic might.
The talks were in part to discuss Beijing's steps to free its yuan currency from its peg to the US dollar, something the election-bound Bush administration is pressing China to do more quickly.
CAUTIOUS MOVES: Before the dinner, though, China's central bank governor said the country had more preparatory work to do before freeing its yuan - a point US officials have conceded by noting strains in China's banking system, though they say officials there need a sense of urgency about currency reform.
"China's forex regime could change on certain conditions but we need to do more preparation," governor Zhou told a small group of reporters before the dinner meeting.
The yuan has been pegged at 8.3 to the US dollar since 1995, which US manufacturers complain gives cheap Chinese imports an unfair price advantage and has helped drive US trade deficits to record levels.
Friday's communique repeated language adopted last September in Dubai and refined at a meeting in Boca Raton, Florida, in February that urged flexibility in exchange rates - words taken as aimed at China and some other Asian nations where pegs or official interventions are more frequent.
"We emphasise that more flexibility is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms," the communique said.
The officials also repeated that "excess volatility" in global exchange rates could hurt economic growth.
Economists said the statement contained few surprises.
"On balance, the market was prepared for a similar statement to that which was crafted in Boca Raton. The dollar is expected to go slightly higher as a result on Monday," said Chris Turner, head of foreign exchange research at IDEAglobal in London.
"On oil, the statement was not harsh enough to trigger much of a sell-off in the market next week".
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