Opec

DUBAI, United Arab Emirates -- Oil producers may decide to increase output when they meet in March, an OPEC delegate said yesterday, signaling a possible retreat from restraints that caused prices to double last year. "All options are open" when the Organization of the Petroleum Exporting Countries meets in March, a United Arab Emirates OPEC delegate said. The remark is a departure from members' previous statements. Oil ministers from Saudi Arabia and Kuwait said last month that output cuts beyond March had OPEC support.

CANDIDATES for both U.S. political parties are free to run against President Hugo Chavez of Venezuela. But don't pretend that will bring down oil prices. Mr. Chavez is the charismatic, new-leftist, military, elected strong man of the country that thought-up the Organization of Petroleum Exporting Countries (OPEC) and later subverted it by exceeding production quotas. Mr. Chavez is busy reviving OPEC as a meaningful cartel that can cost the carefree U.S. motorist and home-heater a bundle over a sustained period.

MOTORISTS must expect today's gasoline prices to continue. Homeowners, especially in New England, can expect steep heating-oil price increases this winter and no sympathy from the oil cartel. The Organization of Petroleum Exporting Countries (OPEC) may claim that a price range of $22 to $28 a barrel is its target. In fact, at the OPEC meeting concluding in Vienna last Monday, oil ministers were clearly content with prices in the $32-$35 neighborhood. What they fear most, since their governments depend on oil revenues, is a precipitous drop to one-third of that, as happened two years ago. As long as they keep their act together: Never again.

OPEC's surprise decision to cut oil production by 900,000 barrels a day is expected to slightly push up prices at gasoline pumps but to have little impact on the prices consumers will pay for heating oil this winter, analysts said yesterday. "As far as OPEC goes, they really don't set prices," said Dennis O'Brien, director of the Institute for Energy Economics and Policy in Norman, Okla. "OPEC's reputation is very overblown. It has more of a short-term effect on perception." Those who rely on oil heat can still expect to pay about the same as they did last winter, or a little over $1.30 per gallon on average, according to the U.S. Department of Energy's most recent short-term outlook, which has not been revised, a department economist said yesterday.

NEW YORK - Crude oil had its biggest two-day drop since March 2003 as the Organization of the Petroleum Exporting Countries promised yesterday to increase global oil supplies in an effort to prevent high prices from curbing economic growth. Gasoline futures also plummeted as OPEC pledged to boost oil quotas by 2 million barrels a day with a possible increase of 500,000 barrels in August. The move signals that U.S. refiners will have adequate supplies to process into gasoline to meet demand during the summer driving season.

LONDON - The president of the Organization of the Petroleum Exporting Countries said yesterday that there was little the group could do to lower fuel prices soon, because OPEC's oil production quotas were not the main problem. His remarks contradicted statements last week by Saudi Arabia, the cartel's leading producer, calling for increases in the quotas to ease price pressures. Purnomo Yusgiantoro, who is both the cartel's president and the energy minister of Indonesia, said the recent sharp rise in retail prices for gasoline and other fuels was "due to factors beyond OPEC's scope."

VIENNA, Austria - The Organization of the Petroleum Exporting Countries said yesterday that it would cut production by 5 percent next month in hopes of propping up world oil prices. Blaming slower growth in what it termed key economies, the organization said the cut, equal to 1.5 million barrels a day, is being taken because crude oil supplies "far exceed demand." "With the approach of the seasonally lower demand in the second quarter, unchecked production could precipitate a price collapse, serving the short- and longer-term economic interests of neither producers nor consumers," OPEC said in a statement.

Scrambling to control high oil prices, the Organization of the Petroleum Exporting Countries will meet this weekend in Beirut, Lebanon, before its official conference there Thursday, and might pursue a plan to raise quotas sharply or do away with them entirely, an OPEC spokesman said yesterday. Lifting quotas entirely "could be one of the options" that OPEC considers this weekend, Abdulrahman al-Kheraigi, a spokesman for the 11-nation cartel, said in a telephone interview. "That option might be seriously considered," he said, "but I haven't heard anything official.

AVERAGE U.S. gasoline prices pushed above $1 a gallon last week for the first time since late last year, according to a government survey. One reason: The Organization of the Petroleum Exporting Countries reached an agreement to cut production of crude oil in an effort to prop up its price. OPEC and four non-OPEC countries have promised to reduce output by 2.1 million barrels a day.Crude prices fell to around $10 a barrel last year, as the Asian economic slowdown created an oil glut. Lately, though, they've risen above $15 a barrel for May delivery on the assumption that OPEC's deal will work.

VIENNA - OPEC, seeking to keep oil at $25 a barrel, plans to maintain output quotas at the lowest level in a decade even if it means losing customers to rival producers. Ministers from the group will meet this week to establish new targets because the agreement that drove prices up 27 percent by lowering output 1.5 million barrels a day expires this month. Officials from Saudi Arabia and other members, which pump one-third of the world's oil, have said they will extend this year's cuts.