Germany says oil prices "threat for world economy"

By Thomas Krumenacker

BERLIN (Reuters) - The German government is alarmed about the rapid increase in oil prices and is now calling for greater international cooperation to counter its unrelenting rally, Economy Minister Michael Glos said on Sunday.

Glos said Germany, the world's third largest economy, wants greater cooperation between consuming and producing nations to find ways to halt the rise after oil prices soared more than $10 higher on Friday to a record above $139 a barrel.

"The increase of the oil prices is now alarming and becoming a real threat for the worldwide economy," Glos told Reuters. "No one can predict the developments now because speculation is playing such a large role."

Previously Glos had said the higher oil prices were not that serious for Germany, the world's number one export nation, because the strong euro made crude imports cheaper and oil producing nations had more money to buy German exports.

But on Sunday Glos said in an email response to questions from Reuters that neither consumers nor producers were being helped by so much instability in oil prices.

"Even though the impact of the rising oil prices is being cushioned by the strong euro and increased export activity to producing countries, developments mean both producers and consumers need to work together to find a solution," he said.

"It is in the interests of both groups of countries that there is more price stability," said Glos, who added that it was vital on top of that for Germany to redouble efforts to reduce dependence on oil by increasing energy efficiency.

Friday's increase in oil prices was the biggest ever one-day surge.

"In general the high oil price does not have such a serious impact on us," Glos had said in a German newspaper interview published on May 13. The government had assumed an oil price of $105 per barrel in its 2008 growth forecast of 1.7 percent.

"The high oil price strengthens the purchasing power of oil producing nations. That benefits us because German manufacturers are a favored supplier of these countries." he said in May.

In Japan, energy ministers from Group of Eight nations plus non-G8 China, India and South Korea -- meeting on Sunday -- could agree on little more than expressing "serious concerns" over oil prices, according to a preliminary communique.

"We will continue to vigorously promote policies and measures for improving energy efficiency," the 11 nations, which account for two-thirds of world energy consumption, said in the communique ahead of their meeting in Aomori, northern Japan.

The group also called on oil producers to boost investment to ensure steady supplies, but did not ask them to pump more crude, despite growing public anger over climbing fuel prices, likely to haunt G8 leaders when they meet next month.

(Writing by Erik Kirschbaum, editing by David Cowell)