Mumbai: Officials from the world's biggest oil consuming nations are meeting in Aomori, northern Japan to discuss ways of tackling the growing oil market volatility even as crude prices rose to a record $139 a barrel on Friday.

The meeting of energy ministers from the US, Japan, China, India and South Korea comes amid rising public discontent over governments' failure to soften the oil shock.

Oil prices recorded their biggest one-day gain on Friday, rising over $10 to a new record high above $139 a barrel.

US sweet light crude for July delivery on the New York Mercantile Exchange hit an intraday record of $139.12, breaking the previous trading record of $135.09, marking its largest single-day increase in oil prices on record. Prices later settled at a record $138.54.

London Brent crude settled $10.15 higher at $137.69, off the record $138.12 hit earlier.

Oil prices gained $16 or about nine per cent in a two-day rally amidst mounting tensions in West Asia and a dropping dollar. This takes oils gains in the past one year to 44 per cent.

A six-year bull run has seen oil prices rise sevenfold since 2001. Oil prices are forecast to hit $150 a barrel by July 4.

The energy ministers' meeting comes ahead of the full G8 plus three gathering on Sunday. Representatives from the United States and Japan, plus non-G8 South Korea, China and India will meet in Aomori, northern Japan, on Saturday, with energy conservation at the top of the agenda.

Investment banker Morgan Stanley estimates oil prices to top $150 by the start of US travel holiday season beginning July 4, as strong demand in Asia triggers a slowdown in shipments of crude to the US.

The 44 per cent rise in oil prices is threatening economic growth, especially in major consuming nations, including the United States.

The rally in oil prices has been due mainly to rising demand in emerging economies like China and India as well as an influx of cash from investors seeking a hedge against a weaker dollar.

Support to the rising oil also came from remarks by Israel's transport minister that an attack on Iran's nuclear sites looked "unavoidable."

Worries of a potential disruption of the OPEC member's crude supply have helped support prices over the past year.

High prices have started to eat away at global growth however, with some consumers such as the United States and the United Kingdom showing signs of lowering consumption.

Most Asian governments,- including India, have raised fuel prices and cut subsidies, stirring concern rising prices could cut further into demand.

The International Energy Agency (IEA) said it may cut its 2008 demand growth projection further after having already more than halved it to 1.03 million barrels per day (bpd).

Top energy consumers also aim to work with suppliers to show that they have the resources to meet long-term demand and temper investor enthusiasm.