If they really stick to this for a year, they could end up forcing up the market more than they intend. Ishii Yoshiro, an analyst with Japan National Oil Corp., doubted that all members of OPEC would comply fully with the lower production levels. Cheating by members has undermined OPEC's efforts to stabilize prices in the past. He predicted that the group probably would not achieve a compliance rate of much better than 80 percent. A production decrease was proposed two weeks ago by Saudi Arabia, Iran, Venezuela and Algeria, together with non-member Mexico.
Experts say gasoline prices are likely to continue rising.
George Gaspar, an analyst with Robert W. Baird and Co., a financial services firm based in Milwaukee, expects increases of as much as 10 cents a gallon and said the cuts could continue to buoy gasoline prices into the fall when prices typically decrease slightly as colder weather makes driving less attractive. Analysts say OPEC's plan to curtail production accounted for at least half of the rise in gasoline prices, which last reached this level two years ago. Another reason for more expensive gasoline has been the approach of spring, when people usually begin spending more time in their cars, and dwindling gasoline inventories.