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The prime minister’s spokesman said that it was “disappointing” that the four-day strike, which is due to start at 6am on Friday and which could affect deliveries to up to 10% of filling stations, was still set to go ahead.

“The most responsible thing the public can do is to continue to buy as normal,” the spokesman said.

Ministers have already activated procedures intended to safeguard fuel for emergency services and to ensure that stocks are moved around the country to areas where there are shortages.

But the government believes it is “inevitable” that some stations could run out of fuel if the strike goes ahead.

One effect of the contingency arrangements, which were last used at the time of the strike at the Grangemouth refinery in April, is to allow oil companies to share information about their supplies by exempting them from the anti-cartel rules that normally prevent this kind of information-sharing.

About 500 drivers who work for haulage companies Hoyer UK and Suckling Transport are due to go on strike. They are the sole suppliers to around 1,000 Shell petrol stations, mainly in south-east England, the north west, central Scotland and the Midlands.

The prime minister’s spokesman told reporters today that the government was “encouraged” that both sides were taking their dispute to Acas, the conciliation service. “We would encourage both sides to get back to the table and to reach a resolution,” he said.

“We do not believe that any strike action is justified because that would disproportionately impact on the lives and livelihoods of millions of people in the country not involved in this dispute.”

Asked if he feared panic-buying, he said: “We want the public to continue to buy as normal so as to avoid creating problems that might otherwise not exist.”

On Sept. 22, 2000, U.S. President Bill Clinton ordered the release of oil from the nation’s strategic reserve as crude had reached a 10-year high. Concurrently, the central banks of the U.S., Europe, Japan, U.K. and Canada bought euros in the first- ever concerted attempt to stem the currency’s slide, after it fell below 85 U.S. cents for the first and only time.

“The market has linked a weaker U.S. dollar to higher oil prices, and vice-versa,” DBS Group Holdings Ltd. said in a report. “That’s why a lot is riding on the weekend meeting.”

The chart of the day shows the correlation between the daily percentage change in the dollar index and crude oil, which formed a record negative last week. The link between the two peaked in positive territory on December 18, 2000, shortly after the unprecedented dual intervention and a Supreme Court ruling that cemented George W. Bush’s election victory over then-Vice President Al Gore.

The chart also shows that the most-recent positive correlation was in September 2007, after the Federal Reserve started cutting its benchmark rate in response to the worsening U.S. credit crisis.

Lowering Expectations

The negative correlation is “either because people are marking down their expectations for the U.S. outlook, or oil exporters wanting to preserve their returns do raise the price,” Sophia Drossos, chief currency strategist at Morgan Stanley and former manager of the Federal Reserve’s foreign-exchange portfolio, said in an interview June 6.

“We should see that negative correlation — that inverse correlation — persist, and if we do see energy prices rise, I think the dollar will fall,” she said.

The G-8 — the U.S., Japan, Canada, Germany, France, U.K., Italy and Russia — along with China, India and South Korea, which will also send officials for meetings on the sidelines, account for about 65 percent of global energy demand.

Writing in Monday’s Financial Times, Mr Geithner, a key US policymaker throughout the credit crisis and one of the main architects of the rescue of Bear Stearns, says that the US Federal Reserve should play a “central role” in the new regulatory framework, working closely with supervisors in the US and round the world.

“At present the Fed has broad responsibility for financial stability not matched by direct authority and the consequences of the actions we have taken in this crisis make it more important that we close that gap,” Mr Geithner says, in an excerpt of a speech to be delivered today at the Economic Club of New York.

The credit crisis has heightened pressure on US policymakers to consider sweeping changes to a regulatory system for financial institutions which has commercial banks such as JPMorgan Chase and Citigroup regulated by the Fed and investment banks such as Goldman Sachs and Lehman Brothers more loosely regulated by the Securities and Exchange Commission.

Mr Geithner called the system “a confusing mix of diffused accountability, regulatory competition and a complex web of rules that create perverse incentives and leave huge opportunities for arbitrage and evasion”.

However, legislation to overhaul US financial regulation is unlikely to start advancing through Congress until next year when the new administration takes office.

In his speech, Mr Geithner will also say the Fed is examining whether to make “permanent” some of the new liquidity facilities put in place during the credit crisis, and called for central banks to establish a “standing network of currency swaps, collateral policies and account arrangements” to bolster liquidity during a future crisis.

Meanwhile, Malcolm Knight, the general manager of the Bank of International Settlements, the Basel-based central banking group, told the FT that the financial system now faces a growing risk of exchange-rate volatility as investors and central banks grapple with the impact of rising commodity prices and other inflationary pressures.

“It is not clear if the rest of the world is going to continue to fund the US current account deficit at current levels of exchange rates,” he said. “The pattern of the exchange rates is subject to considerable uncertainty now.”

The comments are likely to be closely watched by investors and policymakers, since they come at a time of renewed market focus on the outlook for the dollar relative to the euro and other currencies. Last week, Ben Bernanke, Fed chairman, broke with the US central bank’s traditional silence on currency matters to make clear that it does not want any further dollar weakness.

While the dollar rallied on Mr Bernanke’s remarks, it retreated later in the week after European Central bank comments suggested an interest rate rise and as the price of crude oil soared, heightening inflation fears.

…

The Met Police believe criminals used the centres in Park Lane, Hampstead and Edgware to store criminal assets.

Armed police continue to guard the buildings as specialist officers search the 7,000 safety deposit boxes.

So far only a third of the boxes have been opened and the finds have also included a firearm, counterfeit currency, several works of Renaissance art and a substantial amount of high value jewellery.

Rudd said there was a “brittleness” in bilateral ties, and that while regional bodies like ASEAN and APEC had achieved much, there was a need for a region-wide architecture to tackle the growing challenges of the Asia-Pacific century.

“Terrorism in Southeast Asia will remain a continuing challenge. Across wider continental Asia, the rise of India and China represent great economic, environmental, energy policy and security reverberations for the future,” Rudd said in a speech to the Asia Society Australiasia in Sydney.

“I believe it is time that we started to think about where we want to be with our regional architecture in 2020. We need to have a vision for an Asia-Pacific Community,” he said, adding the world could learn from Europe where centuries of animosity had been transformed into transnational cooperation.

Rudd said an Asia-Pacific Community, which should include the United States, Japan, China, India, Indonesia and the other states of the region, would encourage cooperation and action on economic, political and security issues but also develop a “genuine and comprehensive sense of community”.

“The danger in not acting is that we run the risk of succumbing to the perception that future conflict within our region may somehow be inevitable,” said Rudd.

“At present none of our existing regional mechanisms as currently configured are capable of achieving these purposes.”

Friday’s spike in the July contract for light crude on the New York Mercantile Exchange marks the largest single-day increase in oil prices on record. The contract hit an intraday record of $139.12, breaking the previous trading record of $135.09.

“The bulls are running rampant and the bears have panicked,” said oil industry analyst Stephen Schork, editor of the Schork Report. “It’s pure hysteria, absolute panic,” he added.

The rally highlighted concerns that retail gas prices, which have surged near a nationwide average of $4 a gallon, will continue to crimp consumer spending and fuel inflation.

Stocks fell more than 400 points Friday due to the rally in crude prices and a report from the Labor Department that showed the unemployment rate rose to 5.5% in May from 5% in April, the biggest monthly jump in more than two decades. The economy lost 49,000 jobs, marking the fifth straight month of job losses.

Meanwhile, the dollar continued its slide versus the euro on the weak jobs report and comments Thursday that the European Central Bank could potentially raise interest rates. The dollar also tanked versus the yen.

Concerns about instability in the Middle East flared after hawkish comments from Israeli Deputy Prime Minister, Shaul Mofaz, about possible attacks on Iran.

Also contributing to the surge: Morgan Stanley (MS, Fortune 500) analyst Ole Slorer released a report saying that he expected a “short-term spike in oil prices,” as high as $150 a barrel by July 4.

Softening dollar

The dollar began its slide Thursday after European Central Bank president Jean-Claude Trichet said the bank might raise interest rates, which would strengthening the value of the euro. If the euro gains, oil becomes cheaper, European investors buy more oil, raising the price of oil in U.S. dollars, according to Phil Flynn, senior market analyst at Alaron Trading.

The “European Central Bank pulled the rug out from under us,” said Flynn.

Trichet’s comments came the day after Federal Reserve Chairman Ben Bernanke said he wanted to try to support the dollar to bring energy prices into check. “The two central banks are out of step with each other,” he said.

Global demand, especially for gas and distillates in emerging markets, supported the record build in crude prices.