Oil, housing may delay US recovery: Paulson

WASHINGTON (AFP) — Soaring oil prices and a slumping housing market may prolong sluggishness in the US economy, while improvement in the financial market will continue gradually, Treasury Secretary Henry Paulson said Thursday.

"The headwind of high energy prices has the potential to lengthen the economic slowdown," Paulson said in a speech to the Women in Housing and Finance association.

"I believe market conditions will continue to improve, but not in a straight line," he said. "Our financial institutions must continue to improve risk management and disclosure."

On Thursday, US banking giant Citigroup announced it expects to have "substantial" writedowns in the second quarter because of its exposure to financial products linked to subprime mortgages.

Spiraling defaults on subprime mortgages, home loans given to people with patchy credit histories, are at the ...