G7 Discusses High Cost Of Oil

It looks like the spike in oil prices would more adequately be described as a permanent increase. See below from Reuters:

Record oil prices, which have risen about 50 percent over the past 12 months, and China's rigid currency peg to the dollar are frequently cited as two of the biggest risks to world economic stability.

U.S. Treasury Secretary John Snow said on Friday the G7 was preparing for an era of more costly energy and could handle recent increases that have pushed prices over $58 a barrel.

Another G7 official said: "Concern is growing because it seems the higher prices may not be out of line and are more permanent than was thought."

"We have to prepare the world to live with oil prices at these levels," the official added.

With crude demand from the rapidly industrializing developing world one of the drivers of higher energy costs and oil producing nations already close to full production, the G7 may look at ways of simply mitigating the impact.

The need for better data on crude production and stockpiles is likely to be re-emphasized, officials said, along with an increased focus on conservation, alternative energy sources and improvements in industrial productivity.

Those in the speculate that we'll never see cheap gas prices again.