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

To: articwarrior who wrote (32114)	11/25/1998 9:21:00 AM
From: RealMuLan	Respond to of 95453

As OPEC Meets, Saudi Rules Out More Oil Cuts By Andrew Mitchell Wednesday November 25 8:59 AM ET VIENNA (Reuters) - OPEC exporters meet Wednesday admitting there is nothing they can do to prevent more economic hardship from an oil price slump of historic proportions. Leading Organization of the Petroleum Exporting Countries policy maker Saudi Arabia Wednesday was not wavering on its insistence on full adherence to existing supply curbs before it can even consider any new measures. Minority OPEC calls for tougher supply limits to ease a huge glut beyond restrictions agreed earlier this year have been drowned out by familiar allegations that illicit OPEC oil is being leaked onto the market. Saudi officials said Riyadh was not opposed to new supply cuts but cannot act while it sees fellow OPEC members pumping 600,000 barrels a day more than permitted. ''Let's first adhere to pledged cuts. After that we can assist the markets with whatever action is needed,'' a Gulf source familiar with Saudi policy said. That means, OPEC will now merely prolong for a further six months, to the end of 1999, its existing production restrictions. ''Saudi Arabia sees an extension of the current agreement as the logical conclusion to the meeting,'' the Gulf source said Wednesday, shortly before ministers were scheduled to start their winter conference. Libyan Oil Minister Abdullah al-Badri, reflecting the thinking of most independent analysts, said OPEC needed to remove at least another million barrels daily from the 75 million bpd market. ''It is clear that there is too much supply in the market and some measures are needed but whether OPEC can do that now is not at all certain,'' added a senior Iranian delegate to the talks. Oil this year, on average at $13.67 a barrel for benchmark Brent, is priced lower than at any time since 1976. Brent Wednesday traded at just $11.30. Venezuela and Iran, OPEC's second and third biggest producers, appear to be the countries most clearly in contravention of June's supply curbs which cut OPEC output by 2.6 million bpd -- some 10 percent. Venezuela stands accused of increasing output for domestic political reasons ahead of December presidential elections. Caracas has admitted falling short of its June commitment to the tune of 125,000 bpd. But industry insiders said Venezuelan output in recent weeks has risen some 400,000 bpd in excess of its agreed limit. Elections in two weeks time mean Caracas is unable anyway to consider any new policy. Meanwhile there are growing concerns that Iran is wavering on its promise to reduce supplies, amid renewed Iranian claims that Tehran originally was asked to make its cut from an unfairly low baseline. The issue will get an airing when ministers meet in a closed session scheduled for 1300 GMT, followed by a formal gathering at 1700 GMT. Algeria's Oil Minister Youcef Yousfi will brief ministers after a whistle-stop tour of Gulf nations as part of an Algerian plea to OPEC heads of state for immediate new output cuts. Algerian President Liamine Zeroual has called for a summit of the leaders of oil exporting countries, possibly early next year, one of the few signs that any new effort is underway to rally oil out of the crippling trough that will slice $50 billion off OPEC export revenues in 1998. Analysts agree the 11-member group probably needs to remove at least another million barrels daily to siphon off a huge stockpile of oil and address stagnating global demand. ''Oil prices are likely to remain on the floor next year,'' said Raad Alkadiri of Washington's Petroleum Finance Corp.