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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: James Cherney who wrote (39253)	3/8/1999 12:20:00 PM
From: Platter	Read Replies (2) of 95453

Its the unions, not the Gov't.......LONDON, March 8 (Reuters) - Oil prices were spurred to an eight-week high on Monday as talks between OPEC heavyweights Saudi Arabia and Iran reignited hopes that the cartel might reach a consensus on more oil output cuts. But comments from officials of the main oil union in Venezuela undercut the rally which at one point added 58 cents a barrel to lowly prices. A top official of the country's main oil union Fedepetrol said Oil Minister Ali Rodriguez had promised he would not accept more production cuts at an OPEC meeting later in March. "Venezuela will not accept more cuts. It will comply with what is already proposed, but it will not accept new cuts. That's what he said," said Fedepetrol's Bladimiro Blanco after a meeting with Rodriguez. Brent lost some of its gains to stand 36 cents higher at $11.92 a barrel by 1646 GMT but dealers said they would continue to hedge against the possibility of new curbs on supply. Prices had opened higher on Monday in the wake of a meeting on Sunday in Riyadh between Saudi Arabian Oil Minister Ali al-Naimi and his Iranian counterpart Bijan Zanganeh. The discussions were the latest in a series of contacts between Organisation of the Petroleum Exporting Countries producers and came just two weeks before the group meets in Vienna to decide output policy. Iran and Saudi Arabia have been trying to resolve a dispute over the issue of how to measure the baseline for Iranian output cuts, agreed last year under a 2.6 million barrel a day OPEC supply reduction. The issue has blocked progress toward the further cuts OPEC members already agree are necessary to lift oil prices from last year's 22-year lows. Naimi and Zanganeh met hot on the heels of talks in Riyadh last week between Iran's Foreign Minister Kamal Kharrazi and Saudi leaders. Iranian President Mohammad Khatami described the negotiations as "positive" and Saudi Crown Prince Abdullah pointed to unspecified "agreements" between the two sides. "I think from an historic point of view a fair amount of diplomatic prepositioning involving heads of state before an OPEC meeting is meaningful," said Peter Gignoux of Salomon Smith Barney. "It's another OPEC cliffhanger." However, it remained unclear whether the troublesome Iranian baseline dispute had finally been put to bed at Sunday's meeting. "We made progress on a number of issues," was all a Gulf source familiar with Saudi policy would say. Traders will now be watching the visit of Foreign Minister Kamal Kharazzi to fellow OPEC producer Venezuela in a week's time. Gulf Arab oil ministers may also meet on Wednesday to prepare for the March 23 OPEC gathering. Analysts have said that the oil group needs to slice at least another million barrels per day (bpd) on top of existing cuts. Non-OPEC producers like Mexico and Norway are likely to be asked to chip in again. Oil prices at about $11 a barrel on average so far this year are running even lower than last year's $13.30, itself a six dollar decline from prices in 1997. Prices in dollars per barrel: Mar 8 Mar 5 (1646 GMT) (close) IPE April Brent $11.92 $11.56 NYMEX April light crude $13.72 $13.30

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