Record high oil prices are set to dominate the agenda at the G8 summit which takes place in Japan’s northern island of Hokkaido on Monday and Tuesday.

Oil prices in Asian trade held steady near record highs on Friday. New York light sweet crude for August delivery eased three cents to $145.26 a barrel from its record close of $145.29 on Thursday at the New York Mercantile Exchange.

Brent North Sea crude for August delivery rose 10 cents to $146.18 from its record close of $146.08 on Thursday in London. The contract hit an intra-day record of $146.69 earlier on Thursday.

Oil prices have risen more than 50 per cent so far this year and accelerated again yesterday after Ali Naimi, the Saudi Arabian oil minister, said that the world's biggest oil exporter had no immediate plans to boost crude output because there was no need to do so.

Mr Naimi said Saudi Arabia was ready to raise production if the kingdom determines supply-and-demand fundamentals have changed. But for now, “all our buyers are satisfied and happy,” he said.

Oil prices have also climbed as stockmarkets have fallen worldwide. The major stock market indices are all down by double digits since the start of the year.

Record high oil prices are threatening the global economy and both developed and undeveloped countries have seen protests. European truckers and fishermen have led street protests from London to Barcelona while several Asian nations have scrapped controls and raised prices, angering consumers.

Meanwhile, consumers who feel poorer are tightening their belts, hurting retailers, as the UK has seen with Marks & Spencer's shock profits warning this week. Company profits are also being eaten up by the huge rise in energy costs.

The Group of Eight leaders is expected to try to draw up measures to balance the supply and demand of oil and will also call for closer co-operation with oil producers.

The United States, Britain, Canada, France, Germany, Italy, Japan and Russia will all be represented at the summit, where they are also expected to discuss concerns that the weaker dollar is a factor behind high oil prices. However, with finance ministers and central bankers absent it may be difficult to make headway on the currency issue.

As the US currency declines, it costs more to buy oil and gold in dollar terms, therefore a weaker dollar can push commodity prices higher. Against this backdrop, the US is increasingly finding itself having to defend its economic policy to foreign leaders who are battling inflation.

Soaring inflation, driven by higher fuel and food prices, is currently deterring G8 leaders from making interest rate recommendations to central banks.

“It is being questioned what kind of a message we will be able to send on rising oil prices,” Masaharu Kohno, Japan's deputy foreign minister said yesterday.

Analysts said a show of concern by the G8 would not be enough to ease global inflation, which has dominated concerns in recent weeks just as the world economy was starting to recover from the credit crisis.

Kyohei Morita, chief economist at Barclays Capital Japan, said: "The summit faces unprecedented challenges amid signs of stagflation, which had not been seen in 30 years.”

“But there is a mismatch between the themes of the summit and who is participating, making it hard to actually implement any concrete and effective steps,” he said, noting that OPEC oil producers and Southeast Asian couterparts, whose trade restrictions helped push up commodity prices, would not be joining the G8 summit.

Tatsuo Kageyama, analyst at Kanetsu Asset Management, said oil prices would stay high partly due to speculative money flowing into the oil market and the perception that demand will remain strong in the long run while supplies are tight.

Concerns over food availability have found their way onto the summit agenda, as food prices have leapt due to soaring commodity prices.

The World Bank estimates up to 105 million people could become poor due to rising food costs and there are expectations that the G8 leaders will issue a separate statement on food prices.

The statement is expected to call on governments to release available food stockpiles or reserves to global markets and seek steps to boosts agricultural output in developing countries.

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