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

To: stevedhu who wrote (62995)	3/26/2000 11:46:00 PM
From: Brian P.	Respond to of 95453

March 26, 2000 Oil in Asia Slips As OPEC Reviews Output REUTERS INDEX \| INTERNATIONAL \| BUSINESS \| TECHNOLOGY Filed at 10:51 p.m. ET By Reuters SINGAPORE (Reuters) - Crude oil prices weakened in Asia on Monday as OPEC members gathered to hammer out an agreement that could see output raised by about five percent. The May New York Mercantile Exchange crude futures contract was trading at $27.71 per barrel at 0300 GMT, slipping 31 cents from the New York settlement on Friday where the contract had ended 71 cents stronger. Oil ministers of the Organization of Petroleum Exporting Countries, meeting in Vienna ahead of a conference starting on Monday, were looking to nail down details of an agreement that could raise their output by 1.5 million barrels per day, sources said over the weekend. Saudi Arabia, OPEC's most influential member, appeared to favor a minimum increase of 1.5 million bpd, raising the cartel's output quota by just over six percent. Price hawk Iran wants to keep the increase to no more than one million bpd but was believed to be flexible, OPEC sources said. ``There is no big difference between OPEC producers on output,' said a Gulf source familiar with Saudi policy. ``We think we can get 1.5 million bpd, maybe more -- that is what the market needs,' said another Gulf insider. SMALLER RISE HELPS PRICES But traders said a rise of one million to 1.5 million bpd would actually be considered bullish, as the market had been hoping for a larger production increase. They said the news could keep oil prices from sliding too far. ``A lot of news came out over the weekend, some bullish and some bearish. What is bullish is that it looks like OPEC is not going to increase as much as people were expecting,' said Mario Chavez, a broker at E.D. & F. Man in New York. Major consumers have urged OPEC to raise output substantially to restore inventories depleted by the cartel's supply curb deal, which had sought to cut OPEC output by 4.3 million bpd for a year until end March 2000. The export curbs pushed U.S. crude prices to a nine-year peak of $34.13 on March 7, although prices have since fallen by 18 percent on anticipation of an output rise when the deal expires. The United States, which consumes a fifth of world oil, wants OPEC to inject two million bpd of net new supply into the market from April, to head off potentially drastic fuel shortages in the coming months. But news over the weekend that Iraq would seek a rise in exports was dampening prices, brokers said. ``The main thing affecting the market today is bearish, and that is the increase in exports that Iraq is going to see,' E.D. & F. Man's Chavez said. Iraqi Oil Minister Amir Muhanmmad Rasheed said on Saturday that Iraq would return to its full 3.1 million bpd output capacity within weeks. Rasheed had told Reuters in an interview earlier that a rise in production and exports had been made possible by the United Nations' release of more spare parts for Iraq's oil industry. Iraq, which exported about 2.4 million bpd at the end of last year, cut output by 300,000 bpd early this year, saying that holds on spare parts contracts at the U.N. was depriving its industry of needed equipment. Rasheed said production was cut by a further 400,000 bpd recently, taking Iraqi exports to about 1.7 million bpd.