Opec

BEGGING the world's oil-producing nations is no way to conductthe nation's energy policy. Unfortunately, the United States has painted itself into this corner and doesn't have many other short-term choices. This time the imploring worked. The Organization of Petroleum Exporting Countries, the 10-member oil producers' cartel, voted this week to increase its production by 7 percent. With the exception of Iran (which later agreed to increase its production to preserve its market share), the other OPEC countries realized that without the modest boost, they might jeopardize the current global economic recovery.

GENEVA -- After five days of talks, OPEC announced yesterday that its 12 members had agreed to individual quotas to limit production over the next six months to 24.5 million barrels a day.Kuwait and Iran secured significant increases in their individual shares of OPEC's output, while Saudi Arabia, the world's largest producer and exporter of oil, agreed to freeze its production at current levels until April.Experts called the agreement a credible attempt by the Organization of Petroleum Exporting Countries to limit production and increase the price of oil, which has fallen by 20 percent since early summer.

HOUSTON - Some OPEC members are signaling their reluctance to proceed with announced cuts in petroleum production after crude oil prices climbed in the past week to their highest level since the Persian Gulf war. Oil prices eased yesterday after the statements, falling 57 cents, or more than 1.5 percent, in New York, to $37.05 a barrel. The Organization of the Petroleum Exporting Countries is scheduled to discuss production quotas at a meeting March 31 in Vienna, Austria, but several representatives from member nations, including officials from Qatar and Venezuela, said they were hesitant to significantly cut production.

VIENNA, Austria - Saudi Arabia signaled yesterday that it was proceeding with its plans to cut oil production, prompting a gathering of OPEC officials here to voice support for higher crude oil prices, which have become a sensitive political issue in the United States. "Throwing more oil on the market would be destructive for everybody," said Ali Naimi, the oil minister for Saudi Arabia, the most influential member of the Organization of the Petroleum Exporting Countries. Naimi sought to brush aside criticism that his nation was seeking higher returns from oil exports, claiming that a flurry of speculative activity in commodity markets was behind the recent increase in oil prices.

GENEVA -- OPEC announced yesterday that its members had agreed to lower oil output to 24.5 million barrels a day in the third quarter from 24.7 million currently as a way to bolster sagging prices.The cut in production is considered minimal, but OPEC officials said Oil Minister Hisham Nazer of Saudi Arabia had submitted proposals for further "voluntary" cuts that might reduce the overall output of OPEC below the new ceiling.In promoting its proposals, Saudi Arabia took the extraordinary step of holding talks with Iran, with which it has been politically at odds since the Persian Gulf war.Iran's government-owned radio network said yesterday that President Hashemi Rafsanjani had telephoned Saudi Arabia's King Fahd to seek support for higher world oil prices.

BEIRUT, Lebanon - OPEC ministers said yesterday that they will increase oil production, allowing members to pump at will and bypass the quota system that has governed supplies for most of the past two decades. "Everybody should produce what they want over the next few months," Qatar's energy minister, Abdullah bin Hamad al-Attiyah, said in an interview in Beirut, where OPEC meets tomorrow. "We do not want to see any shortage of supply at all, and we want to avoid shocks." Saudi Arabia, the world's biggest oil exporter, will ensure that markets have enough supply, said the kingdom's oil minister, Ali al-Naimi.

IT WASN'T all that many months ago that gasoline prices in America were at their lowest levels in decades. In the fall of 1998, the price of a barrel of oil -- in real terms -- was about the same as in the early 1920s. That is no longer the case. Last March, the 11 members of the Organization of Petroleum Exporting Countries along with Mexico and Norway, agreed to cut production by about seven percent. Unlike previous unsuccessful attempts to constrict the flow of crude oil to international markets, this agreement held.

THE HIGH PRICE of oil focused the world's attention by week's end. It was a subject of summit diplomacy in the corridors of the United Nations, the cause of industrial action turning French roads into chaos and a wild-card threat to the predictability of the U.S. election. This is a tribute to President Hugo Chavez of Venezuela, whose election transformed both his country's oil policy and the viability of the Organization of Petroleum Exporting Countries (OPEC) as an oil cartel. Crown Prince Abdullah of Saudi Arabia and President Clinton agreed that $25 a barrel would be a healthy crude oil price.

OPEC, which pumps a third of the world's crude oil, may raise its target price by 30 percent because the decline in the value of the dollar has reduced purchasing power in member states, the group's president said yesterday. The Organization of the Petroleum Exporting Countries is studying whether to increase its 4-year-old price band of $22 to $28 a barrel, Purnomo Yusgiantoro said. Some OPEC members "think an increase in the price band won't hurt the world economy," OPEC President Purnomo, who is also Indonesia's oil minister, said in Jakarta.

VIENNA, Austria - Members of the Organization of the Petroleum Exporting Countries have agreed to cut production targets by 1.5 million barrels a day when they meet today, Saudi Arabian Oil Minister Ali al-Naimi said yesterday. "There is an agreement," al-Naimi, whose nation is the world's biggest oil producer, said after consulting with colleagues in Vienna before the meeting. A daily reduction of 1.5 million barrels would be 5.6 percent of the combined quotas adopted by 10 OPEC members in November.