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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: OX who wrote (44113)	3/25/2000 3:49:00 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

OPEC Ministers Split on Whether to Increase Oil Production Next Month By Mark Deen OPEC Ministers Split on Whether to Increase Oil Production Vienna, March 25 (Bloomberg) -- OPEC oil ministers arriving in Vienna ahead of a Monday meeting said they haven't agreed on whether to boost oil production on April 1, when the group's quotas expire. An output increase has appeared less certain in recent days as some members of the group such as Iran argue that more supplies aren't needed because oil prices have dropped by a fifth from about $32 barrel earlier this month. ``Everybody is talking about an increase, but not everybody has agreed on an increase,' said Rilwanu Lukman, secretary- general of the Organization of Petroleum Exporting Countries. OPEC needs to boost daily output by 2.3 million barrels, or 8.6 percent, to meet demand and refill oil and fuel supplies to the average seen in much of the past decade, according to the International Energy Agency, a government-backed adviser to 24 of the world's largest oil-consuming nations. Still, some OPEC producers are balking at increasing output, saying that demand will fall when winter ends in the Northern Hemisphere, reducing purchases of heating fuels. ``We don't think it is the right time to have an increase because of the season and the reduction in demand,' said Iraqi Oil Minister Amer Mohammed Rasheed. Indonesia's oil minister, Susilo Bambang Yudhoyono, predicted a ``heated debate' at the meeting because the group is divided about whether to increase oil output, Iran's official IRNA news agency reported. ``There are discussions on finding mechanisms that would allow stability in the market because we expect a drop in demand in the second quarter,' Algerian Oil Minister Chekib Khalil said. ``Algeria expects demand to pick up in the third and fourth quarters when demand in the U.S. market increases.' OPEC is under pressure from the U.S. and the European Union to pump more oil to bring prices down. Oil Rallies Oil prices rallied Friday as members signaled any boost would be too small to relieve dwindling inventories, which in the U.S. are close to the lowest levels of the last two decades. Brent crude oil for May settlement jumped 43 cents to $25.91 a barrel. Consumers can expect a ``small' increase in production, based on current quotas, Venezuela's Deputy Foreign Minister Jorge Valero said Friday. Producing countries fear the return of a glut that sent prices 12-year lows in 1998. OPEC says it wants production low enough to keep prices around $25 a barrel. ``The OPEC countries have seen what low prices can do to their economies,' said Roger Cagle, finance director of London- based Soco International Plc, which produces oil in Mongolia, Yemen and Tunisia. ``The general consensus is that oil prices will end up in the $20- to $25-a-barrel range for the next five years.' Iraq OPEC member Iraq, which has no quota but is seeking one, will reach its full crude oil production capacity of 3.1 million barrels a day ``in a few weeks,' Iraq's oil minister told reporters. That would be a 530,000 barrel-a-day increase over the 2.57 million barrels a day the IEA estimates the country produced in February. Venezuelan Oil Minister Ali Rodriguez said Iraq's intentions won't affect decisions by the rest of OPEC on production levels. Iran has argued that a decline in demand of 2.8 million barrels a day during the second quarter of the year would relieve the need for more OPEC oil. Oil ministers from Kuwait and Qatar, also countries that have argued for keeping current quotas, met today with counterparts from Saudi Arabia and the United Arab Emirates. In an effort to soften Iran's position, U.S. Secretary of State Madeleine Albright announced March 17 that the U.S. would allow imports of Iranian fruits, nuts, caviar and carpets. Too many comments from Washington are making it difficult for OPEC members to support an production increase, a Kuwait oil ministry official said. ``I've never seen an OPEC meeting that has so much political pressure sitting on top of it,' the official said. ``We have to be able to go back home and say to our people that we increased output and reduced prices because the market needed it, not because of pressure from the U.S.'