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To: John Carpenter who wrote (39380)	3/9/1999 5:54:00 PM
From: Captain James T. Kirk	Read Replies (2) \| Respond to of 95453

March 9, 5:09 pm Eastern Time: Oil holds gains after Iran-Saudi accord LONDON, March 9 (Reuters) - World oil prices consolidated recent gains on Tuesday as details emerged of an accord between Gulf OPEC rivals Saudi Arabia and Iran which could pave the way for more OPEC supply curbs. Saudi Arabia will present to other Gulf Arab OPEC ministers later this week a compromise agreement over Iran's baseline for oil output cuts, a Gulf source said. ''They have reached an agreement in principle on the Iranian baseline issue. It is no longer an obstacle,'' a source from a Gulf country said. London April futures for North Sea Brent by 1800 GMT had risen seven cents a barrel to $11.83 a barrel. The agreement was forged by the oil ministers of Saudi Arabia and Iran at their surprise meeting in Riyadh on Sunday, the source said. A meeting of Gulf Cooperation Council (GCC) oil ministers scheduled for Wednesday in Saudi Arabia would examine the accord and also study prospects for additional supply cuts by the Organisation of the Petroleum Exporting Countries. ''This is an OPEC issue. The agreement has to be approved by all of OPEC,'' the source said. If ratified, the agreement means Iran would make any further cuts from its current output of about 3.6 million bpd, rather than the 3.318 million bpd quota it was assigned last year. Iran has taken on the task of persuading other members of the producer club to back the accord. ''Iran has to go and convince other people,'' a regional source said. ''The agreement might upset some of the countries who have been abiding by their cuts, appearing to reward Iran at the expense of others,'' a regional analyst warned. Iranian foreign minister Kamal Kharrazi will visit fellow OPEC member Venezuela on March 17 for two days to discuss the oil cartel's upcoming meeting on March 23 in Vienna. Kharrazi has already visited Saudi Arabia and Libya to discuss the OPEC meeting, and has publicly called for fresh production cuts to lift prices from their current historical lows. Venezuela now appears to be the main obstacle to further supply cuts. Venezuela's deputy oil minister Alvaro Silva said on Tuesday that his country would not propose further limits at the Vienna meeting but would impress on other countries the need to comply fully with last year's OPEC agreement to cut 2.6 million bpd. Analysts have said that the oil group needs to slice at least another million barrels per day (bpd) to lift prices from last year's 22-year lows. Non-OPEC producers like Mexico and Norway are likely to be asked to chip in again. Oil prices at about $11 a barrel on average so far this year are running even lower than last year's $13.30, itself a six dollar decline from prices in 1997.

To: John Carpenter who wrote (39380)	3/9/1999 6:01:00 PM
From: Gary Burton	Read Replies (1) \| Respond to of 95453

What Ven said today was "no new cuts" but then they added almost in the next breath that all the others must adhere to their committments before any new cuts could be considered... Translation.. "let's see what Iran has to say next week and gee maybe if by Mar 23 everyone at the table suddenly is able to say that they're now onside (last minute cuts) we can then go ahead and cut some more.Sure would like to show the union who's boss..sure would like to show the other guys at the table how tough and important we now are in shaking them down to cut down to their prior agreed level.".....My 2c is that since Ven has now gone public with the 'no new cuts' statement ahead of the meeting, it is mere posturing to get others onside and allow Chavez to be able to assume a leadership role in the Club. If they had said nothing, I'd be more worried that they meant just that period.

To: John Carpenter who wrote (39380)	3/9/1999 6:30:00 PM
From: The Ox	Respond to of 95453

What's very ironic to me is that for once I agree with Iran in this battle. The Saudi's took advantage of the Gulf War by grabbing Iraq's output quota and have yet to relinquish it. They also stuck Iran with a lower quota which is why Iran doesn't feel it's fair to ask them to join in the cuts. My take is that if OPEC agrees that the recent SA/Iran deal is fair, they can now move forward with across the board cuts from everyone, including the non-OPEC producers. Saudi Arabia continues to have Iraq's output quota in their production numbers and I think this may be the biggest problem. If Saudi Arabia takes the lead in production cuts and allows it's production to be substantially reduced, there is a very good chance the rest will follow suit. I think the key to Venezuela's statements have been, in my own words, "we won't cut until a) everybody is in compliance, and b) everybody agrees to further cuts". 100,000 barrels a day is about a million dollars a day. With the struggles South American countries are facing, a million dollars a day means a lot. The last thing Venezuela needs is to lose a million dollars a day and at the same time see others cheat. If oil prices continue to weaken, many nations will be faced with a lose/lose situation. Cheating will keep prices low, but it will bring in more money. A tough call for a nation with serious economic problems. I am encouraged by what I read in the press but I don't expect big news from the meeting. I prefer to be "pleasantly" surprised by a new round of cuts but I don't think I'll risk new capital to wager on this possibility. Michael

To: John Carpenter who wrote (39380)	3/9/1999 9:41:00 PM
From: gmccon	Respond to of 95453

I just caught bits and pieces of oil news and stuff towards the end of the day on CNBC, but people in the business are seeing oil at $15 by the end of the year. Seems I heard too, that Iran is committed to acting more like people, not to mention cutting back on production of oil. It makes no sense to me that they'd want to act like a bunch of Westerners, but we all know they can't keep giving their only natural resource away (to the advantage of the infidels in the West) for much longer. Its lose-lose, all the way.