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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Ronald J. Clark who wrote (59666)	2/3/2000 1:48:00 PM
From: Ken Ludwig	Read Replies (3) \| Respond to of 95453

And more jawboning. The headline was in very large type and later we find this economist is merely speculating. Ain't we got fun. OPEC Seen Boosting Oil Output in March REUTERS INDEX \| INTERNATIONAL \| BUSINESS \| TECHNOLOGY Filed at 1:14 p.m. ET By Reuters WASHINGTON (Reuters) - Economic self-interest should compel OPEC to raise crude oil production this year by about two million barrels a day, and this could occur as early as its March meeting, World Bank officials told reporters. The 11-member Organization of Petroleum Exporting Countries is facing growing political pressure from big customers, such as the United States, to ramp up production and contain world oil prices, which have nearly tripled over the past year. ``We think the most likely scenario is in March they will raise production,' Shane Streifel, energy economist for the World Bank, told a briefing in advance of Thursday's release of the Bank's quarterly commodity forecast. The increase could be as much as two million barrels per day, based on the International Energy Agency's estimate of the gap between world consumption and output in the first quarter, he said. The meeting is scheduled to begin on March 27. The economists cautioned it was also possible that OPEC would decide at its meeting next month not to increase production. ``It's not a foregone conclusion,' Streifel said. The cartel could also choose to gradually increase output over a period of months to keep prices firmly underpinned, the economists noted. But without OPEC pumping more oil into the market, prices may rise substantially from current prices of around $28 a barrel, Streifel said. Skyrocketing prices could jolt the economies of many countries, and offer a tempting incentive for non-OPEC producers to increase their own exploration and production, Streifel said. ``If prices remain high, it becomes very, very profitable to explore and develop oil,' he said, noting that some non-OPEC members have already started those efforts. U.S. Energy Secretary Bill Richardson has launched a round of diplomatic talks with energy ministers in Norway and Mexico, and will travel to Saudi Arabia and Kuwait later this month for talks about volatile oil prices. The Clinton administration, which insists it is not trying to pressure OPEC to increase output, is also considering a proposal to release oil from the nation's emergency stockpile to ease prices. Based on the assumption that OPEC will increase output, the World Bank forecast oil prices would begin dropping after the first quarter of 2000 and eventually settle below $20 per barrel, Streifel said. How quickly oil prices could fall to that level will depend on the size and timing of OPEC's decision, he said. In March 1999, OPEC decided to cut production by nearly five million barrels per day, three months after world oil prices skidded to $10 a barrel. The cartel has been unusually disciplined, with relatively little cheating by members, according to oil industry analysts. The slash in production has trimmed global oil stocks to their lowest level in decades, said Don Mitchell, the principal economist for the World Bank's commodity team. If OPEC decides not to increase production, as members have suggested might be the case, ``you could see a sustained period of high prices', Mitchell said. Over the long term, plentiful world oil supplies should eventually pull prices down, he said.