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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Tulvio Durand who wrote (24819)6/26/1998 4:03:00 PM
From: Captain James T. Kirk  Read Replies (1) of 95453
 
OPEC promises oil prices will rise
VIENNA, Austria, June 26 (UPI) - After vowing major oil production cuts Thursday, the Organization of Petroleum Exporting Countries has launched a high-profile campaign to persuade analysts their action will boost oil prices.

In Vienna, where the OPEC oil ministers announced an overall oil reduction of 1.35 million barrels daily effective Wednesday, Saudi Arabia's oil minister said it is the current low price of oil which will prevent cheating _ at least until the price rises.

Ali al-Naimi told British radio this morning: ''We know that once the price goes up people will cheat,'' but he added ''The market doesn't believe compliance will be 100 per cent. They're probably right. No one is seeking 100 per cent compliance.''

Naimi also insists the OPEC agreement should still enjoy sufficient credibility to bring about a change of sentiment in world oil markets.

He claims the market will be strengthened by the Thursday agreement to cut oil on top of the decision last March by OPEC to cut 1.245 million barrels.

Naimi and other oil ministers have dispersed to the European capitals to promote the credibility of the action.

Oil analysts note that in the past OPEC found it hard to keep its members in line, since many of them are often political or commercial competitors and sometimes even enemies.

But Naimi says that oil prices, which averaged higher than $19 a barrel in 1997 and plunged to around $14 this year, are reason enough for OPEC cooperation to deal with burgeoning world inventories.

In Paris today, French radio aired an interview with Venezuela's oil minister, who supported the view.

Erwin Arrieta, told French television the ''main point is to get the market normalised.'' He also acknowledged that it could take four to six weeks ''to see the reaction of the market.''
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