Newspaper article THE JOURNAL RECORD

World Oil Market Subject of OPEC Ministers' Meeting

Newspaper article THE JOURNAL RECORD

World Oil Market Subject of OPEC Ministers' Meeting

Article excerpt

BRUSSELS, Belgium (AP) - Oil ministers of the Organization of Petroleum Exporting Countries will gather this week to discuss the world oil market but are unlikely to tamper with a formula that has brought them higher-than-expected prices.

``There will be talks about the future, but no decisions,'' predicted Pierre Terzian, editor of the Paris-based newsletter Petrostrategies.

Peter Gignoux, director of the international energy department for Shearson Lehman Hutton Inc. in London, expects little from the meeting. ``They're going to come and go,'' he said.

The OPEC monitoring committee will begin meeting Friday in Vienna. Talks are expected to center on the group's pricing strategy and current production levels. Although only eight oil members comprise the panel, all 13 OPEC ministers are expected to attend.

The discussions will be the first since the cartel met last November and set a crude oil production ceiling of 22 million barrels a day for the first six months of 1990. The previous ceiling was 20.5 million barrels for the final quarter of 1989.

Analysts estimate that OPEC countries, spurred by persistent cheaters Kuwait and the United Arab Emirates, have been producing at least a million barrels a day above their cap.

Even so, prices have remained above OPEC's benchmark of $18 a barrel, reflecting strong demand by the United States and other consuming nations.

Between November and February, OPEC's basket of seven crudes has averaged more than $19 a barrel. Prices appear to have softened slightly in March but remain above the target price, averaging $18.45 in the first week of the month.

West Texas Intermediate, the benchmark American grade of sweet crude, is currently priced in the $20 to $21 range, down from $22 to $23 in January.

Analysts say prices could ease further in the second quarter when demand for oil declines with the onset of warm weather.

Nick Antill, analyst at the London-based County NatWest, forecasts demand for OPEC oil will run about 22 million barrels a day in the April-June quarter, below current production of 23. …

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