Newspaper article THE JOURNAL RECORD

Uncertainties over Iraq, Libya May Dominate OPEC Meeting

Newspaper article THE JOURNAL RECORD

Uncertainties over Iraq, Libya May Dominate OPEC Meeting

Article excerpt

BRUSSELS, Belgium (AP) _ Uncertainties about oil production from Iraq and possibly even Libya _ both targets of international sanctions _ could dominate a special meeting next week of the 13-nation Organization of Petroleum Exporting Countries.

OPEC ministers had scheduled the talks in Vienna on April 24 in case of a serious weakening in crude prices in the spring when demand for oil normally drops.

But prices, buoyed partly by unease over Libyan exports, have been stronger than expected, making it unlikely the group will feel pressure for immediate production cuts.

OPEC is a critical supplier of the oil to the industrialized world.

Despite the cartel's chronic inability to enforce its own limits on production, OPEC still has an enormous impact on the cost of energy.

Pierre Terzian, editor of the Paris-based newsletter Petrostrategies, said the anxiety over Libya _ and its effect on prices _ has masked the continuing excess supply of crude.

"The market is weaker than it seems," he said.

In February, the ministers agreed to restrain production by more than a million barrels of oil a day in a desperate bid to halt a steep slide in prices.

With super-producer Saudi Arabia in the lead, the cartel reduced pumping last month to a total of 23.5 million barrels a day, still above its spring ceiling of 22.98 million barrels a day.

The kingdom, the world's largest crude exporter, is producing around 8 million barrels a day, at least a half-million barrels below February's level, analysts estimate.

The Saudis have refused to lower output to their OPEC cap of 7.9 million barrels a day.

Iran, the cartel's No. 2 producer, may be criticized at the meeting for violating promised cuts in its output. Analysts estimate Iranian production at 3.4 million barrels a day, 200,000 barrels above its spring quota.

"We don't like to see a country like Iran doing this," said an OPEC delegate, speaking on condition of anonymity because a fellow cartel member was involved. …

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