Newspaper article THE JOURNAL RECORD

Analysts Expect OPEC to Do Little This Quarter

Newspaper article THE JOURNAL RECORD

Analysts Expect OPEC to Do Little This Quarter

Article excerpt

BRUSSELS, Belgium (AP) _ For the Organization of Petroleum Exporting Countries, doing nothing may be the best strategy for keeping world oil prices strong while maintaining the peace.

Consumers are buying more oil ahead of winter, crude prices are strengthening, and one of the cartel's top producers remains sidelined.

Such a scenario faces ministers of the 13-nation Organization of Petroleum Exporting Countries who will meet Wednesday in Geneva to set an output ceiling for the rest of the year.

Current betting: The ministers will take the easy way out and raise the current oil production cap only slightly, if at all, in the Octobercember quarter.

"The end result will probably be a kind of status quo settlement," said Peter Bogin, associate director of oil markets at Cambridge Energy Research Associates in Paris.

Going into winter, normally a season of high demand for crude, the ministers may choose to avoid a bruising fight over a new production ceiling.

The producers already are pumping about a million barrels a day over their supply limit of some 23.4 million barrels a day. Analysts say they could probably sell even more crude without sending prices tumbling.

"In the fourth quarter, everybody can produce what he wants," Bogin said.

Iran already has added a bit of spice to the meeting by suggesting its production capacity is climbing rapidly and it should be allowed to pump more oil.

There has been no response yet from its main OPEC antagonist, Saudi Arabia, the world's largest crude exporter. The kingdom's influential minister, Hisham Nazer, is expected to attend the meeting. He missed the May conference, throwing the cartel into turmoil.

Vahan Zanoyan, senior director of the Petroleum Finance Co. in Washington, predicted Nazer might hold his fire at this week's meeting.

"There are going to be much bigger fights to come," he said.

The producers likely will battle when Iraq, barred from selling crude since its August 1990 invasion of Kuwait, eventually returns to the market. …

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