Iran says oil prices may fall sharply in 2001

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UPDATE 1-Iran says oil prices may fall sharply in 2001

October 28, 2000 5:38am Source: Reuters

TEHRAN, Oct 28 (Reuters) - Iran's Oil Minister Bijan Namdar Zanganeh said he expected oil prices to fall sharply next year if current levels of production are maintained, the Resalat newspaper reported on Saturday.

``If OPEC carries on its current level of production, oil prices will sharply fall,'' it quoted him as saying. He said this could happen in the second and third quarter of 2001.

He said the cartel would then have to act to lower production otherwise the oil market would face the prospect of excess supply.

Zanganeh said the implementation of an oil pricing mechanism by OPEC to cut oil production by 500,000 barrels per day (bpd) might help in cutting the surplus.

The statement came as OPEC President Ali Rodriguez said the oil exporting cartel would announce a two percent increase in oil supply on Monday night if world prices stayed above its $22 to $28 per barrel target range.

U.S. oil prices fell nearly a dollar to $32.74 a barrel on Friday in reaction to Rodriguez's suggestion of an output increase.

But analysts do not expect the output hike, if it happens, to have much of an impact on real supply since most of the 11-member group is already pumping at full capacity. ^ REUTERS@

http://finance.individual.com/display_news.asp?doc_id=RTJ28a6940reuff&page=news

-- Martin Thompson (mthom1927@aol.com), October 28, 2000


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