Fall in oil prices by mid-year predicted

Source: AFP | Published: Monday March 13, 4:19 AM

WASHINGTON, March 12 - US Energy Secretary Bill Richardson predicted today that oil prices would begin to fall after a meeting later this month of the Organisation of Petroleum Exporting Countries (OPEC).

"You will see gasoline and diesel prices go down," said Richardson, appearing on Fox News Sunday. "They will stabilise and go down over the (northern) spring and summer."

The energy secretary did not say what specific price level the US administration was trying to achieve, but he argued that excessively high or excessively low oil prices were equally harmful to the world economy.

"We are looking for a stable price," Richardson pointed out. "I don't want to get into specifics but it is between 10 and 30 (US dollars a barrel)."

OPEC members are expected to meet in Vienna on March 27 to review their production quotas and decide whether to boost output in response to an outcry in the industrialised world over the sky-high price of oil.

A barrel of benchmark light sweet crude for April delivery was selling at $US31.69 in New York late last Thursday.

Richardson toured several OPEC and non-OPEC oil-producing countries last month as part of the Clinton administration's diplomatic drive to bring oil prices down and provide relief to US consumers.

He praised leaders of Saudi Arabia for recognising the need to ease the price pressure to avoid further volatility on international markets.

"I've had some very good conversations with the Saudis," noted Richardson. "The Saudis have publicly said that they want to see an increase in production. They've talked to Iran that has been a problem because Iran wanted more production cuts. And Iran is moving in the right direction."

At least 10 members of the 11-nation OPEC would have to support a production increase for it to take place, Richardson said.

Saudi Arabia, Venezuela and non-OPEC producer Mexico have come out in favor of an increase, but OPEC members Iran, Libya and Algeria are said to be against it.

http://www.theage.com.au/breaking/0003/13/A5812-2000Mar13.shtml

-- Martin Thompson (mthom1927@aol.com), March 12, 2000