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

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To: John Carpenter who wrote (39380)	3/9/1999 5:54:00 PM
From: Captain James T. Kirk	Read Replies (2) of 95453

March 9, 5:09 pm Eastern Time: Oil holds gains after Iran-Saudi accord LONDON, March 9 (Reuters) - World oil prices consolidated recent gains on Tuesday as details emerged of an accord between Gulf OPEC rivals Saudi Arabia and Iran which could pave the way for more OPEC supply curbs. Saudi Arabia will present to other Gulf Arab OPEC ministers later this week a compromise agreement over Iran's baseline for oil output cuts, a Gulf source said. ''They have reached an agreement in principle on the Iranian baseline issue. It is no longer an obstacle,'' a source from a Gulf country said. London April futures for North Sea Brent by 1800 GMT had risen seven cents a barrel to $11.83 a barrel. The agreement was forged by the oil ministers of Saudi Arabia and Iran at their surprise meeting in Riyadh on Sunday, the source said. A meeting of Gulf Cooperation Council (GCC) oil ministers scheduled for Wednesday in Saudi Arabia would examine the accord and also study prospects for additional supply cuts by the Organisation of the Petroleum Exporting Countries. ''This is an OPEC issue. The agreement has to be approved by all of OPEC,'' the source said. If ratified, the agreement means Iran would make any further cuts from its current output of about 3.6 million bpd, rather than the 3.318 million bpd quota it was assigned last year. Iran has taken on the task of persuading other members of the producer club to back the accord. ''Iran has to go and convince other people,'' a regional source said. ''The agreement might upset some of the countries who have been abiding by their cuts, appearing to reward Iran at the expense of others,'' a regional analyst warned. Iranian foreign minister Kamal Kharrazi will visit fellow OPEC member Venezuela on March 17 for two days to discuss the oil cartel's upcoming meeting on March 23 in Vienna. Kharrazi has already visited Saudi Arabia and Libya to discuss the OPEC meeting, and has publicly called for fresh production cuts to lift prices from their current historical lows. Venezuela now appears to be the main obstacle to further supply cuts. Venezuela's deputy oil minister Alvaro Silva said on Tuesday that his country would not propose further limits at the Vienna meeting but would impress on other countries the need to comply fully with last year's OPEC agreement to cut 2.6 million bpd. Analysts have said that the oil group needs to slice at least another million barrels per day (bpd) to lift prices from last year's 22-year lows. 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.

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