OPEC Ministers Expect to Keep Taps Wide Open

THE JOURNAL RECORD, November 26, 1991 | Go to article overview
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OPEC Ministers Expect to Keep Taps Wide Open


VIENNA, Austria (AP) _ The Organization of Petroleum Exporting Countries should hold its oil taps wide open during the winter, even though a glut of crude may be forming, several OPEC ministers said Monday.

Saudi Arabia's influential oil minister, Hisham Nazer, said the 13-nation cartel should produce enough in the months ahead to cover demand from oil-consuming nations.

"We want to meet the demand in the market," he said after arriving late Monday for the OPEC winter conference. The meeting begins today.

Nazer predicted demand for the group's oil at 25.2 million barrels a day in the January-March quarter, about a million barrels above current production.

Earlier, the Middle East Economic Survey, a respected newsletter published in Nicosia, Cyprus, said the kingdom would likely seek an increase in the cartel's output ceiling to match strong sales.

Meanwhile, oil ministers Ginandjar Kartasasmita of Indonesia and Jibril Aminu of Nigeria called for a rollover of the current ceiling of 23.65 million barrels a day through the first quarter of next year.

"It will probably be wiser just to maintain the present level of production," Ginandjar said.

Aminu agreed, even though he said a glut of crude may be building up.

"I think there is a bit too much oil for the (winter) season," he said.

Still, he said, "it is bearable" now.

Oil prices rose a bit early this fall, climbing within about 30 cents of the cartel's target of $21 a barrel, but they have been retreating in recent weeks.

The average price of a basket of crudes monitored by OPEC was $19.74 a barrel last week, down from $19.98 in the previous week.

Prices for U.S. and European light sweet crudes usually are about a dollar or two higher than the OPEC average. During November, the prices of the premium grades have fallen about $1.50 per barrel.

Aminu cautioned that if the cartel kept its output high after the winter, it could run into "serious trouble."

"The challenge is to ensure that we do not allow (prices) to drop in the second and third quarter as a result of excess oil in the market," he said.

The cartel has been following a "free-for-all" pumping policy since Iraq's invasion of Kuwait in August 1990. It threw out its quota system so countries could produce as much as possible to make up for lost Iraqi and Kuwaiti crude.

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OPEC Ministers Expect to Keep Taps Wide Open
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