Oil price surge may hit EU recovery

The surge in oil prices, which could hit Europe's fledgling recovery, has prompted renewed EU calls for OPEC producer states to increase output.

Oil prices have shot to record highs of over $40 a barrel as traders fret about Middle East instability and insatiable demand from major consumers such as the US and China.

EU energy commissioner Loyola de Palacio warned today that record world crude prices could shave a few decimal points off of growth in the 12-nation euro zone, which is emerging from a prolonged slowdown.

She added that the oil prices surge could also endanger the international economic recovery.