Crude futures fall, Bush blames China for surge in oil prices

Crude futures fell Friday, moving back below the US$51 mark, ahead of a meeting where the Group of Seven industrial nations were to discuss the economic impact of soaring energy prices.

Japan warned that high prices could derail its economic recovery, and U.S. President George W. Bush blamed China for the surge in crude and gasoline prices in America.

Light, sweet crude for May delivery fell 53 cents to US$50.60 per barrel by midmorning in Europe in electronic trading on the New York Mercantile Exchange. It had briefly dropped below US$50 on Thursday but finished the day higher.

Heating oil fell more than a cent to US$1.4717 per gallon (3.8 liters), while unleaded gas dipped less than half a cent to US$1.5010 a gallon.

In London, Brent crude for June fell 62 cents to US$51.67 a barrel on the International Petroleum Exchange.

In Washington on Thursday, Bush said China's appetite for crude was primarily to blame for rising oil prices, saying it was "growing like mad."

"My view of China is, is that it's a great nation that's growing like mad," said Bush, according to a transcript of his remarks made to the American Society of Newspaper Editors convention on the White House Web site.

"And that's one of the reasons why Americans are seeing over US$2 gasoline, is because demand for energy in China is huge, and supply around the world hasn't kept up with the increase in demand," he said.

There was no immediate response to Bush's comments from Beijing.

Prices at the pumps in the United States are around US$2.25 per gallon (3.8 liters) compared to under US$1.80 a year ago.

"I will tell you with US$55 oil, we don't need incentives to oil and gas companies to explore," Bush said. "There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent."

China is the world's second-largest consumer of crude behind the United States, and rising demand in both countries in a time of limited excess production capacity has analysts worried that the oil market is even more vulnerable than usual to supply disruptions.

Oil prices are roughly around 35 percent higher than a year ago despite a 14 percent dip in Nymex crude futures since reaching an intraday high above US$58 a barrel last Monday _ after the Paris-based International Energy Agency forecast slower demand growth in 2005.

In Japan on Friday, Dow Jones Newswires reported Economy Minister Heizo Takenaka as saying Tokyo was closely monitoring crude prices, which could crimp its economic recovery.

Finance Minister Sadakazu Tanigaki said oil prices were firmly on the agenda for the Group of Seven industrialized nations meeting in Washington that begins later Friday.

"The G7 ministers will discuss what is an appropriate level of world oil supply and also what oil-importing countries should do in their daily economic activities," he said.

EN-LAI YEOH, Associated Press Writer

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Author`s name: Editorial Team