From: mtaghavi@magnus.acs.ohio-state.edu (Amir Taghavi)
Subject: OPEC ministers likely to seek higher oil price 
Organization: The Ohio State University
Date: Tue, 15 Sep 1992 16:33:27 GMT


	GENEVA, Switzerland (UPI) -- OPEC ministers gathered in Geneva Tuesday
determined to raise the price of oil by at least $1 a barrel to help
offset losses caused by the weak U.S. dollar.
	As oil ministers of the 13-member Organization of Petroleum Exporting
Countries held meetings in advance of the conference that opens
Wednesday, analysts said OPEC could take actions to boost the price of
its crude by a minimum of $1 a barrel.
	Each $1-a-barrel increase in world oil prices translates into a rise
of 2.3 cents a gallon at the gasoline pump and for home-heating oil is
passed on to the consumer. A barrel contains 42 gallons.
	Although Saudi delegates refused to comment, it was widely speculated
that Saudi Arabia, edging away from its traditional position as a price
moderate, would back attempts to boost the price of crude.
	Saudi Arabia is OPEC's largest and most influential producer.
	OPEC members are under increasing pressure to achieve higher crude
prices because their oil revenues have fallen by about 10 percent as a
result of the recent drop in the value of the U.S. dollar.
	Analysts believe OPEC could boost the price of oil either by
convincing oil markets that its members will stick to their official
national output quotas or by maintaining its current production ceiling
of 22.98 million barrels a day.
	By the end of the year, this could mean that the 13-nation cartel
could achieve its target price of $21 a barrel for the OPEC basket of
seven crudes.
	The average price for the seven crudes currently is $19.43 a barrel.
	Some OPEC members argue that the cartel's present production of just
over 24.2 million barrels a day leaves little room for an increase in
the output ceiling.
	But an assessment of supply and demand presented by OPEC Secretariat
suggests that demand for OPEC oil in the last quarter of the year could
rise to about 25 million barrels a day. World oil demand peaks in the
winter because of the heating season in the Northern Hemisphere.
	There was speculation among experts monitoring OPEC developments that
the ministers would agree to roll over the 22.98 million barrel-a-day
ceiling for the second consecutive quarter to avoid further political
infighting in the cartel.
	Discussion of an increase in the ceiling would involve bitter
negotiations over individual output quotas and intense pressure from
Saudi Arabia, which has expressed serious reservations that its
allocation of 7.88 million barrels a day is too low.
	Saudi Arabia is estimated to be producing between 8.1 million and 8.2
million barrels a day.
	While delegates were not expected to tackle the issue until their
year-end meeting in November, they were certain to at least approach the
potentially divisive question of returning market share to Iraq when it
is allowed to start exporting oil again.
	Experts believe Iraq would be in a position to rapidly resume exports
of about2 million barrels a day if United Nations sanctions were lifted.
	Saudi Arabia, which had a 5.8 million barrel-a-day production quota
before the Gulf war, took over the largest portion of Iraq's share of
the market after the United Nations barred Iraq from exporting oil
because Baghdad invaded Kuwait.
	Kuwaiti delegates in Geneva said their country's oil production was
picking up rapidly and was running at between 1.25 million and 1.3
million barrels a day. Since May, OPEC has allowed Kuwait to produce at
will to help it recover from the Gulf war.
	Before it was invaded by Iraq, Kuwait had a production quota of 1.5
million barrels a day.
	OPEC's 13 members are Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq,
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and
Venezuela .


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