Challo, go with your instincts,ask your dog.-g- this just in.
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By DIRK BEVERIDGE
.c The Associated Press
VIENNA, Austria (March 30) - Despite skepticism in the oil market, OPEC ministers insisted today that they will deliver their promised production cuts to push prices higher.
Ministers gathered to discuss the market woes in an emergency meeting in late afternoon of the Organization of Petroleum Exporting Countries. Some called for even more action to rescue the market.
The OPEC president, Obaid bin Saif al-Nasseri of the United Arab Emirates, told ministers that petroleum producers must ''halt the downward price spiral'' to keep the global economy in balance.
The recent low prices have been a bonanza for oil consumers but devastating for the group and other producers.
Earlier Monday, OPEC got a boost from Norway, after oil minister Marit Arnstad pledged to slash 3 percent of the Scandinavian country's daily production. That would remove roughly 100,000 barrels from the glutted global petroleum market.
Norway, a non-OPEC member that is the world's second largest oil exporter after Saudi Arabia, said its cuts would take effect April 12 and last through the end of the year. But Norway, in a statement from Oslo, reserved the right to cancel its plans if OPEC fails to follow through on its own planned cutbacks.
With Norway onboard, the pledges of production cuts by OPEC and non-OPEC members totaled around 1.5 million barrels a day. Independent analysts say the oil exporters need to remove more than 2 million barrels a day from the market to see a lasting price increase.
''There's still going to be a lot of oil around,'' said Michael Rothman, an oil analyst at Merrill Lynch in New York who often attends OPEC meetings. ''They're in muddle-through mode. They're trying to lessen the downside risk for prices.''
Rothman said that if OPEC doesn't come up with additional cuts, the fact that it called an emergency meeting could backfire by raising expectations of bigger reductions in supply.
Still, the original pledges of lower production pushed prices about $2 per barrel higher on London and New York futures markets last week.
Prices gave up early gains on Monday in London, where Brent crude oil to be delivered in May was off by 55 cents at $14.85 per barrel in the late afternoon on the International Petroleum Exchange.
On the New York Mercantile Exchange, light sweet crude oil for May delivery was off 55 cents to $16.21 afternoon morning trading.
Analysts blamed growing skepticism of the plan.
''The market's looking at the deal now with a little bit more of a cautious eye,'' said John Saucer, energy market analyst at Solomon Smith Barney Inc. in Houston. ''I think you could use the word disappointing.''
OPEC and its newfound non-OPEC allies, also including Mexico, Yemen and Oman, panicked when crude oil prices plunged this winter to their lowest level in nine years. Analysts blamed OPEC's decision in November to pump more, just as the Asian economic crisis and mild winter weather were eroding the market.
Libyan oil minister Abdalla Salem el-Badri says the collapsed market has cost OPEC $15 billion this year in lost oil revenues.
OPEC ministers appeared divided on Monday over whether the group must pledge more severe production cuts, before the first round even takes effect in April.
Qatar's oil minister, Abdullah bin Hamad al-Attiyah said early Monday he was happy with what as been thus far pledged. Nigerian oil minister Dan Etete has taken the same line, although the new Kuwaiti oil minister, Sheik Saud Nasser al-Sabah, and Algeria's minister, Yousef Yousfi, were pushing for greater cuts by OPEC and non-OPEC producers.
Experts have voiced concerns about whether all of the promises by OPEC are real, or whether some countries might attempt some creative math that would make cuts on paper but not in the real market.
Two ministers, Libya's el-Badri and al-Nasseri of the United Arab Emirates, told reporters Monday that 10 of OPEC's members had agreed to make real cuts from their current production. Iraq will not be cutting back as it still produces limited amounts of crude under an oil-for-food deal with the United Nations.
If OPEC members get into a fight over further reductions, top producer Saudi Arabia might face calls to make a bigger sacrifice.
Saudi oil minister Ali Naimi has pledged the biggest cut of all, 300,000 barrels a day. But this amounts to just 3.4 percent of Saudi Arabia's output, compared with cuts of 5 percent or more pledged by some of the others.
OPEC members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
AP-NY-03-30-98 1303EST
Copyright 1998 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.
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