Newspaper article THE JOURNAL RECORD

OPEC Appears No Closer to Regaining Glory of Old

Newspaper article THE JOURNAL RECORD

OPEC Appears No Closer to Regaining Glory of Old

Article excerpt

It's been one year since the oil market plunged into a spectacular collapse, and OPEC appears to have moved no closer to recapturing its days of glory.

Nonetheless, members of the Organization of Petroleum Exporting Countries meet again this coming week, hoping to come up with a formula that will allow prices to rise with no cuts in production.

The oil futures market appears to regard this as economic alchemy, with as much chance of success as changing lead into gold.

When OPEC concluded its last grueling meeting in October, having failed to get a grip on the glutted world oil market, its leadership said it was looking for prices to climb $2 or $3 to around $18 per 42-gallon barrel.

Since then, prices have remained virtually unchanged, hovering around $15, or less than half what they were before the collapse began late in 1985.

Friday trading proved no different. West Texas Intermediate crude oil for delivery in January settled Friday at $15.12 a barrel, up from $15; January heating oil advanced to 44.10 cents a gallon from 42.89 cents; and January unleaded gasoline moved to 41.57 cents a gallon from 41.29 cents.

And now with the OPEC meeting beginning in Geneva on Thursday, trading at the New York Mercantile Exchange has been quiet with prices moving in a narrow range.

``No one wants to take any definitive position with all the uncertainty of the meeting coming up,'' said Nauman Barakat, an analyst in New York with Smith Barney, Harris Upham & Co. ``The general sentiment is that nothing will come out of the meeting.''

Whether there will be any radicaudi Arabian oil minister who was fired a little over a month ago, remains to be seen.

But many observers believe the obstacles to a forceful agreement are too formidable.

``I don't think they'll be able to take any action on production cuts,'' said analyst Peter Beutel with Elders Futures Inc. ``Who would make any cuts? Certainly don't expect any out of Saudi Arabia.''

Barakat said the strains within OPEC are typified by the salvo fired a few days ago by Iraq. Currently exempted from any production quotas, Iraq fears it may be restricted by any agreement reached at the upcoming meeting. …

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