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To: Gerald Walls who wrote (101700)	3/28/2000 7:27:00 PM
From: Mani1	Respond to of 186894

Gerald Re <<I wasn't clear. It seems that the Iranians want an increase of only 1.65 million barrels and the rest of the OPECers want 1.7.>> Initially Iran was voting for a total OPEC (including Iran) oil increase of 1.2 mill barrels. Since every other member voted for 1.7, they pushed for 1.65, perhaps just as a saving face symbolic victory. Iran was saying that OPEC needs to worry about itself not US (the biggest customer!). Re <<Was OPEC producing flat out before their cutbacks?>> No. Every country had quota even before the cutback, but no one was following it since $14 was not enough to finance their economies. So everyone was cheating. When OPEC reduced output quota's last year, the oil futures market did not move since no one thought that OPEC countries would stick to their quota's. Well they all did and demand got much higher since el nino ended so world got colder, Asian economies rebounded and US and Europe stayed strong. And there was oil at +$30. Mani

To: Gerald Walls who wrote (101700)	3/29/2000 7:56:00 AM
From: GVTucker	Respond to of 186894

More OT OPEC stuff.... Gerald, RE: If they're already cheating to the tune of nearly 1.5 million barrels per day, then why won't they continue to cheat? Maybe the cheating will drop to 1,000,000 barrels per day, though. They will continue to cheat, of course, but cheating will be less primarily because a lot of OPEC won't have the wherewithal to cheat. Iran, to take an extreme example, didn't want the production increase because they couldn't take advantage of it anyway. They are cheating a little right now, to the extent that they are already at full capacity. Compliance right now is about 75%. I'm guessing that number will go up to about 85% with the increase, so your estimate of about 1mm bbls is probably about right. That is not sufficient for current demand. Was OPEC producing flat out before their cutbacks? No.