WIRE:03/09/2000 07:52:00 ET FOCUS-Bruised oil climbs back despite output hint LONDON, March 9 (Reuters) - Oil's roller-coaster rally showed fresh resilience on Thursday, clawing back some big losses despite signals OPEC is readying an output hike to avoid hurting the world economy. Benchmark Brent crude stood two percent or 82 cents better at $29.62 a barrel a day after taking a 10 percent walloping on signals that OPEC is heading for an output increase on April 1.

U.S. light crudes were 54 cents higher at $31.80.

Prices plunged on Wednesday on word that OPEC price hawk Iran had lifted objections to a cartel output rise in April following talks with Saudi Arabia, the world's largest producer.

On Thursday Saudi Crown Prince Abdullah appeared to set the seal on a fledgling consensus between the Gulf rivals by saying the kingdom was keen to ensure stable supplies and prices.

The crown prince, who has been running the oil power since King Fahd fell ill five years ago, said:

"We always affirm the importance of stability of oil supplies and prices at reasonable levels and any imbalance between supply and demand would not be in the interests of producers or consumers," he told the official Saudi Press Agency.

"We will strive through collective action as we did in the past to restore balance to the market to safeguard the interests of exporting countries and at the same time not harm the world economy."

In recent weeks Saudi Arabia had signalled it is willing to raise supplies, while Iran had said that the producers' group should extend the cuts because of seasonal declines in demand.

Iran's stand had been backed by OPEC's Algeria and Libya.

But Wednesday's meeting between the Saudi and Iranian oil ministers raised the prospect of OPEC agreeing an increase from April 1 when it meets in Vienna on March 27 to set output policy following the xpiry of current production curbs.

Those curbs, operated in concert with non-OPEC Mexico, have tripled prices over the past year by draining inventories and drawn complaints from key importers such as the United States.

"We can see OPEC putting in place a package which will go some way to satifying the United States, but will not entirely quench its desire for more oil," said GNI brokers in London.

But the market still wants to know exactly how many more barrels OPEC plans to supply to a market starved of supply.

"There is a world of difference between OPEC supplying an extra one million bpd and an extra two million bpd," said GNI.

U.S. Energy Secretary Bill Richardson said on Wednesday the Clinton administration was talking with some non-OPEC oil producers about what to do if OPEC's output hike was not enough.

"What is very important...is that the level of increase be a sizeable amount and secondly, that it be done in a timely fashion," he said.

Non-OPEC producer Mexico has hinted it might move independently of its OPEC allies once the deal expired.

"Our commitments end March 31," Jorge Chavez, Deputy Energy Secretary of Mexico said on Wednesday, adding a seasonal second quarter decline in global oil demand may be less this year than previously, due to low gasoline stocks.

Venezuela's Oil Minister told the same conference he expected demand to slide 2.5 million barrels per day in the second quarter.

http://abcnews.go.com/wire/World/reuters20000309_1029.html

-- Martin Thompson (mthom1927@aol.com), March 09, 2000