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To: Snowshoe who wrote (32511)	12/6/1998 7:27:00 PM
From: Captain James T. Kirk	Respond to of 95453

Sunday December 6 7:14 AM ET Iran, Saudi Seek Closer Ground On OPEC Action By Michael Georgy DUBAI (Reuters) - OPEC powers Iran and Saudi Arabia, anxious over collapsed oil prices, are exerting fresh efforts to align their views on ways of rescuing the petroleum market, sources close to the consultations said Sunday. ''There have been more consultations lately and Iran is ready to back any step that will help the oil price,'' Mohammed Reza Nouri, Iran's ambassador to Saudi Arabia, told Reuters. Iranian-Saudi consultations come at a critical time for the Organization of Petroleum Exporting Countries, which is under mounting pressure from the lowest oil prices since 1976. OPEC failed in its winter meeting last month in Vienna to agree any measures to save prices, indecision that sent a new wave of pessimism across the world oil market. Instead, divisions deepened between OPEC's three biggest producers -- Saudi Arabia, Venezuela and Iran -- together controlling more than half the group's 27 million barrels of daily output. Saudi Arabia believes its two rivals are reneging on supply curbs pledged earlier this year that have failed to lift market depression. Iran insists that the baseline for its own output cuts should be raised to higher levels. The Islamic republic wants Saudi Arabia to reverse some of the production gains it made in the wake of the 1990-1991 Gulf crisis. In November, Saudi Oil Minister Ali al-Naimi and his Iranian counterpart, Bijan Namdar Zanganeh, held talks on sagging oil prices in Tehran but reached no decision on what to do. Despite sharp differences, Iran believes the time is now ripe to try and reach some common ground with Saudi Arabia -- the world's biggest oil exporter and the dominant force in OPEC, a once powerful cartel now plagued by squabbling. ''It is obvious that supply management has to be carried out. The first step is for Iran and Saudi Arabia to understand each other's positions in a clearer way,'' said a source familiar with Iranian thinking. ''The time is now appropriate to raise this issue again. There needs to be new production cutbacks,'' the source added. ''But it has to be done step by step.'' Iran has said it would push for a further OPEC output cut of 1.5 million barrels per day at the next group meeting in March. ''Something has to be done soon,'' said another source familiar with Iran's concerns over weak prices. Iranian newspapers have recently blamed Saudi Arabia for low oil prices, an accusation that does not reflect the government's position. Though OPEC decided not to extend current restraint beyond the agreed June 1999 limit and opted not to deepen cuts, there are signs that further action could be on the cards before the March meeting. OPEC Secretary-General Rilwanu Lukman said Saturday that the oil cartel would not rule out holding an emergency meeting before its next scheduled session in March. Mexican Energy Minister Luis Tellez plans to visit fellow oil producing nations in coming weeks to try and stabilize battered oil prices. Mexico, along with Saudi Arabia and Venezuela, this year masterminded cuts of some 3.1 million barrels per day. But since then, international benchmarks have fallen again. Captain's comments: We are obviously seeing, and have seen, the worst of the worst. The news in general is more optimistic for the next 12 months, OPEC is sh*tting a brick, and the colder weather that is on the horizon will pull us up from these lows. I am going out on a limb here and saying the we will not see another test of this bottom from here. I am now officially long this sector.