Newspaper article THE JOURNAL RECORD

Saudis Fend off Efforts to Slash Oil Production

Newspaper article THE JOURNAL RECORD

Saudis Fend off Efforts to Slash Oil Production

Article excerpt

GENEVA (AP) _ Saudi Arabia on Thursday fended off efforts by its partners in the Organization of Petroleum Exporting Countries for a quick deal to slash the cartel's oil production by more than 1.5 million barrels a day in the coming months.

But the kingdom, the world's largest crude exporter, promised to offer its own ideas today.

Ministers of the 13-nation Organization of Petroleum Exporting Countries failed in day-long bargaining Thursday to wrap up an agreement that would be designed to give a lift to crude prices.

"Everything is still under discussion," said Iraqi Oil Minister Osama al-Hiti after members of the cartel held talks in the evening.

"It is a sensitive meeting," he said. "It's the first important meeting since the Gulf crisis."

A majority of producers favored a sharp cut in the cartel's surging production by slicing output from 24.2 million barrels a day currently to 22.5 million barrels in the spring.

Gabonese Oil Minister Augustin Hervo-Akendengue described a new ceiling of 22.5 million barrels a day as "an objective" that would be "good for all of us."

"The aim is to increase prices," he said.

But sources said Saudi Arabia, the cartel's most powerful member, was holding out for a higher ceiling in the range of 22.7 million to 23 million barrels a day.

Some said the superproducer was insisting on maintaining an enormous chunk of overall output.

Prices rose anyway on the futures market Thursday, with spot-month oil contracts settling at $19.68 per barrel, up 41 cents, at the New York Mercantile Exchange.

In their talks, the ministers are trying to fashion an accord that will pull enough oil off the markets to move prices sharply closer to the group's target of $21 a barrel.

Weak demand for the producers' oil this winter has been blamed in part for sliding prices.

The price of a basket of crudes monitored by the cartel averaged less than $17 a barrel last week. The New York futures price is always several dollars higher because it more closely reflects the value of premium, low-sulfur oil. …

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