Nov. 7 (Bloomberg) -- Surging oil prices nudging $100 a barrel may undermine growth in Europe's biggest economy, German Economy Minister Michael Glos said.

Crude oil rose above $98 per barrel in New York for the first time on speculation U.S. stockpiles fell for a third week and as the dollar fell to a record low.

``It is to be expected that the rising oil price increases the risks for the economy,'' Glos said today in an e-mailed statement, noting that his ministry's forecast of 2 percent growth next year is based on oil prices averaging no more than $80 a barrel.

German growth will slow to 1.9 percent next year from an estimated 2.6 percent in 2007, damped by weaker growth in the U.S. and the euro's rise in foreign exchange markets, the government's council of economic advisers said today.

Still, the euro's continued rise against the U.S. dollar is helping Germany deal with the increase in the price of crude, Finance Minister Peer Steinbrueck said today.

``The stronger the euro gets against the dollar, the better we can cope with the price of oil,'' Steinbrueck told reporters in Berlin. ``That doesn't mean it is without problems,'' he said, without elaborating.

The U.S. currency slumped to $1.4731 per euro, the lowest since the 13-nation currency debuted in January 1999. The euro has gained 11.3 percent against the dollar this year.

Asked earlier today at a regular Berlin news conference whether Chancellor Angela Merkel's government is concerned about the growing strength of the single currency, Finance Ministry spokesman Torsten Albig said: ``No.''

To contact the reporters on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: November 7, 2007 10:06 EST