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IMF Chief: Global Economy Will Tame Oil

Head of the International Monetary Fund said a slowdown in the global economy over the next few quarters will likely tame oil prices.

OSAKA, Japan (AP) -- A slowdown in the global economy over the next few quarters will likely tame oil prices, the head of the International Monetary Fund said Friday.

''The slowdown in growth will influence oil prices'' on the downside, IMF Managing Director Dominique Strauss-Kahn said on the sidelines of meetings among finance ministers of Group of Eight leading nations.

At weekend meetings, the G-8 ministers are expected to push the IMF to study anew how much speculative money is behind soaring oil prices. At a February gathering of finance ministers from the Group of Seven -- which excludes Russia, a G-8 member -- the IMF was asked to check on such speculative flows.

Oil futures prices were trading below $136 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The price for a barrel of oil has swung back and forth in a $10 range over the past week. They traded at a record $139.12 on June 6.

Strauss-Kahn also praised the U.S. Federal Reserve and European Central Bank for the way they have handled market turmoil so far, and defended central banks' focus on inflation.

''Up to now in the subprime crisis, the Fed and the ECB have played their role well ... managing the crisis in the way we would have hoped,'' he said. ''Inflation is a serious problem. It's legitimate that central banks focus all their attention on it.''

In April, the IMF projected global economic growth to slow to 3.7 percent this year from 4.9 percent last year. The Washington-based institution expects that the U.S. economy, the world's largest, will expand just 0.5 percent this year.

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