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

To: kormac who wrote (60511)	2/18/2000 12:13:00 AM
From: Wowzer	Respond to of 95453

Front page of the WSJ tomorrow morning: February 18, 2000 Major Oil Exporters Support A Boost in OPEC's Production By BHUSHAN BAHREE Staff Reporter of THE WALL STREET JOURNAL PARIS -- As crude-oil prices hover above $30 a barrel, some of the world's largest oil exporters are starting to acknowledge that petroleum prices have risen too much and are suggesting that OPEC should boost production. But none of the oil ministers are giving any indication of when and exactly what they might do to force down crude-oil prices, which have reached their highest levels in a decade. Still, in response to the comments Thursday, West Texas Intermediate crude for March delivery fell 59 cents to settle at $29.46 a barrel on the New York Mercantile Exchange Thursday. Mexico's energy minister, Luis Tellez, started the discussion last week, saying that major producers want stable prices below $30 a barrel. He reiterated his position in a radio interview this week, saying he believes both Saudi Arabia and Norway share his country's view that production should be increased. In a television address, Venezuela's oil minister, Ali Rodriguez, joined in, saying, "I think it's time to take corrective measures to avoid provoking serious disturbances in the market." The Saudi position isn't as clear cut. The Korean energy ministry, after a meeting with Saudi oil minister Ali Naimi, early Thursday quoted Mr. Naimi as saying that the ideal price for oil is $20 to $25 a barrel. However, several large producers have been saying that $25 to $28 a barrel is the ideal target. Mr. Naimi, arguably the world's most influential oil official because the kingdom is the world's largest oil producer, also reportedly said that his country will try to stabilize prices. Part of the problem is that the exporters want to build a consensus among members of the Organization of Petroleum Exporting Countries and countries such as Mexico and Norway that joined them in regulating supply. To do that, they also need to agree on what price target they are aiming at, and just the amount of extra oil needed without provoking a price slide. That's hard to do in an industry where demand and supply data are hard to collate. New Pacts May Loom Even so, new agreements may be hammered out in a series of meetings over the next month or so. Mexico's Mr. Tellez is expected to meet with his Norwegian counterpart on March 1 and then with Saudi and Venezuelan officials on March 2. That threesome a year ago brokered the production cuts that sent prices skyrocketing to current levels from lows near $10 a barrel. OPEC is scheduled to meet again late next month to review the quotas. OPEC's cutbacks have been so effective that stocks in consuming countries now are approaching historically -- and some say dangerously -- low levels. Gasoline inventories already are at historical lows in the U.S., which could see gasoline prices rise as the summer driving season heats up as refineries wait for prices to catch up with their rising costs for crude. Those refineries in Europe that can meet U.S. product standards might not be able to help because they also are feeling the pinch and face increased driving demand. U.S. to Express Concern Concerned about high heating-oil prices and the climbing cost of fuels, U.S. Energy Secretary Bill Richardson is scheduled to meet with Mr. Tellez this weekend before traveling to Saudi Arabia and Kuwait next week. On Wednesday, President Clinton said the administration is keeping its options open, implying that the release of crude stocks from the country's strategic reserves isn't ruled out. Sen. Chuck Schumer (D., N.Y.) has been asking the U.S. to release strategic stocks to help ease the high prices. "The situation is alarming and politicians want to be seen to be solving this," said J. Robinson West, a former Reagan administration official who now is chairman of Washington-based Petroleum Finance Co., an advisory group. Still, widely publicized U.S. pressure, instead of quiet diplomacy, might prove counterproductive, if only because these countries don't want to be seen as bowing to Washington's demands. Thursday, Venezuela's Mr. Rodriguez, for one, said OPEC wouldn't be pressured by the U.S. Even so, oil-market experts say more OPEC oil is needed desperately. "The market can't wait for March," said Lawrence Goldstein, president of the New York-based Petroleum Industry Research Foundation. U.S. refiners need another 800,000 barrels a day of crude oil as they turn their plants to producing and stocking gasoline and other products for the coming summer, Mr. Goldstein figures. One way for Middle Eastern producers to work around that is to start producing and putting additional supplies on the water in anticipation of an OPEC deal to raise quota levels. That may be happening quietly. Vahan Zanoyan, president of Petroleum Finance, says that "judging from tanker movements from the [Persian/Arab] Gulf, the Saudis and others are putting more oil on the water." As long as these countries don't actually sell and deliver the oil, they won't be breaching their OPEC-set quota levels. -- Jonathan Friedland and Alexi Barrionuevo contributed to this article.