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Feb 13, 2000 - 01:55 PM

Iraq Speaks of Cuts in Oil Output, Warns of Further Cuts

By Leon Barkho - Associated Press Writer

BAGHDAD, Iraq (AP) - Iraq has reduced its oil output and will consider further cuts unless the United Nations removes its hold on contracts for spare parts, the Iraqi trade minister said in remarks published Sunday.

With world oil prices rising and supplies being tight, a substantial cut in Iraqi exports could push prices higher if the Organization of Petroleum Exporting Countries continues to restrict its production.

U.N. figures and latest data released by the Oil Ministry show that Iraq has slashed its U.N.-monitored oil sales by nearly 400,000 barrels a day.

Its output was about 2.9 million barrels last fall, of which about 2.3 million barrels daily were reserved for exports. Since the start of a new agreement with the U.N. was reached in early December, Iraq has been exporting at about 1.9 million barrels a day, according to figures from the United Nations and the oil ministry.

"If the sanctions committee does not quickly approve contracts submitted to it, Iraq will not be able to continue pumping to the previous levels," Mohammed Mehdi Saleh told the U.N. Secretary-General Kofi Annan in Thailand this week, according to the state-run newspaper Al-Thawra.

Saleh did not say by how many barrels Iraq would cut its output. But Oil Minister Amer Mohammed Rashid told Cable News Network television on Saturday that a cut of "a quarter million (barrels) or even more" was possible.

The sanctions committee vets contracts under the U.N. oil-for-food program which allows Iraq to purchase food, medicine and essential goods in an exemption to the embargo imposed after the 1990 invasion of Kuwait. U.S. and British representatives on the committee have often delayed approval on grounds that certain purchases could have a military use.

The prices of the benchmark North Sea oil hit nine-year highs of $28.20 a barrel last week. The Organization of Petroleum Exporting Countries is to decide whether its production curbs, imposed last year to raise prices, will be maintained at a meeting in Vienna next month.

-- snooze button (alarmclock_2000@yahoo.com), February 13, 2000

Answers

I understand the major oil companies of the world set up OPEC. If this is true, then these companies run OPEC. Question is, What is the behind the sceine purpose of the cut in production? Could it be but another rip-off of the consumer or could it be to see how much strain people can stand before they break and start killing everyone around them?

-- John Lee (hbequip@kachina.net), March 19, 2000.

I understand the major oil companies of the world set up OPEC.

Do you have a link or some kind of information to back up that claim?

-- (provide@some.documentation), March 21, 2000.

Man, even I want to see THAT documentation. The conventional history as it was being set up in the 1970's was that the Arab Leaders set it up themselves, or so the media had it THEN.

Chuck

-- Chuck, a night driver (rienzoo@en.com), March 21, 2000.

From today's issue of USA Today.

http://www.usatoday.com/usatonline/20000324/2068283s.htm

Link

Page 1B

OPEC expected to raise output -- slightly

By Dina Temple-Raston

USA TODAY

An oil producers' meeting in Austria on Monday could have a profound effect on your summer vacation plans.

That's when the Organization of Petroleum Exporting Countries gathers in Vienna to set production targets for the next six months, which will play a major role in determining the price of gasoline during the height of the summer driving season.

''The smart money says they will provide enough oil to prevent starvation but not enough to make anyone think they've been well fed,'' says Bill O'Grady, oil analyst at A.G. Edwards in St. Louis, who expects gas prices to climb 4 cents to 6 cents a gallon in coming months.

OPEC members have hinted that they would be willing to boost oil output by 1 million to 2 million barrels a day over last year's quota. What's unclear is whether the extra oil will be added to OPEC's 23 million-barrel target or to the amount it actually produced, about 24 million barrels, analysts say.

The International Energy Agency, a government-backed adviser to 24 of the world's largest oil-consuming nations, says OPEC needs to boost its current daily output by 2.3 million barrels to meet rising demand and replenish depleted oil supplies.

In the meantime, U.S. gas prices keep rising. A gallon of regular gas hit a nationwide average of $1.53 this week. New York oil prices reached a nine-year high of $34.37 a barrel on March 8 and have been trading more recently in the $27 range.

OPEC members have said they are aiming for a price target between $20 and $25 a barrel, a range economists say won't spark inflation. It's also a level that won't stifle demand and push customers to look for other energy supplies.

Perhaps the biggest surprise over the past year has not been higher gas prices, but rather that OPEC, rarely able to stick to production agreements in the past, has largely adhered to the target it set last year.

''Usually, they are like a bunch of baseball owners and can never agree,'' O'Grady says. ''This is the first modicum of success they have had as a cartel in 15 or 20 years.''

-- (in@the.news), March 25, 2000.