Newspaper article THE JOURNAL RECORD

13 OPEC Members Agree to Oil Production Limits

Newspaper article THE JOURNAL RECORD

13 OPEC Members Agree to Oil Production Limits

Article excerpt

VIENNA, Austria - The 13 ministers of the Organization of Petroleum Exporting Countries signed a production-limiting deal Tuesday aimed at raising the price of their crude oil to at least $18 a barrel and at curbing cheating on individual output quotas in the first half of 1990.

Analysts said the pact, reached on the fourth day of the Organization of Petroleum Exporting Countries' regular winter conference, could slow an expected decline in prices in the first half of the year, when oil demand usually weakens.

It also should help trim production from the present nearly 23.5 million barrels a day.

Prices ``will steadily go up after the market ascertains the durabilty of the agreement,'' Hisham Nazer, the influential oil minister of Saudi Arabia, told reporters.

The ministers agreed to raise the cartel's self-imposed production limit to 22 million barrels a day from the current 20.5 million barrels. OPEC also changed its ``target price'' of $18 a barrel to a ``minimum reference price.''

A basket of OPEC crudes monitored by the cartel stands at $17.74 a barrel.

Late Tuesday, North Sea Brent Blend, the most widely traded international crude oil, was down 15 cents at $18.30 a barrel in spot trading.

The January contract for West Texas Intermediate, the benchmark grade of U.S. crude oil, finished down 38 cents at $19.25 a barrel at the New York Mercantile Exchange.

The pact represents a fragile solution to demands from cartel members Kuwait and the United Arab Emirates for bigger portions of overall OPEC production.

The two each have been producing 2 million barrels a day, or about double their current quotas.

Kuwait agreed to a quota of 1.5 million barrels a day, up from 1.15 million barrels a day, and the United Arab Emirates agreed to a steady quota of 1.095 million barrels a day.

``The UAE did express reservations,'' Subroto, OPEC's secretary-general said at the news conference.

Several ministers acknowledged that they expected the United Arab Emirates to continue overproducing, but perhaps less than before. …

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