Wednesday February 23, 2000 6:27 a.m. EST

Gulf Arab Oil Ministers Meet to Discuss Overheated Prices

DUBAI, United Arab Emirates (AP) -- With Saudi Arabia indicating it thinks current prices are too high, Gulf Arab oil ministers are trying to hammer out a unified stance to take to OPEC next month.

Also today, U.S. Energy Secretary Bill Richardson said his current tour of the Middle East would include discussions with oil producers Saudi Arabia and Kuwait about increasing production to ease prices. While the Saudis are believed to be in favor of production increases, the Kuwaitis are believed to be opposed.

``We want to see oil prices go down,'' Richardson told reporters in Egypt. ``I am going to Kuwait and then Saudi Arabia. These are two nations that are very good friends to the U.S. I look forward to a constructive dialogue with these two countries. It's going to be a friendly, positive discussion. I'm not going there to pressure anybody.''

Richardson refused to say what level he wanted oil prices to reach, saying the market should dictate that.

At today's gathering of Gulf Cooperation Council ministers in Riyadh, Saudi Arabia, which towers over its fellow Persian Gulf states as the world's largest oil producer, was likely to try to garner support for some sort of production increase to cool overheated oil prices.

Saudi officials say that among the diverse GCC positions, Saudi Arabia is leaning toward an incremental increase that would bring international prices down to $20 to $25 a barrel.

However, Kuwait is expected to stick to its opposition to production increases, arguing that any output rise at the beginning of the low-demand second quarter would prompt a deep price slide.

United Arab Emirates oil minister Obeid bin Saif Al-Nasseri said before leaving for Riyadh today that $20 to $25 a barrel would be an acceptable price. He said any decision made on the timing or volume of a possible increase in output by OPEC should be subject to a study of demand, prices and oil stocks at the time.

Al-Nasseri said the most recent price increases were exaggerated and ``not normal.''

``But prices are now starting to retreat,'' he said, adding that market forces will always ensure a limit.

``We'll take any stand which will help the market. The UAE and GCC want to send a comfortable message to the market which will be good for producers and consumers,'' he said.

Iran, the second-largest producer inside OPEC, has opposed a production increase at this time.

In the past two weeks, some OPEC members and non-OPEC producers like Mexico have called for OPEC to increase production beyond its current 22.976 million barrels a day agreement, which does not include production by OPEC member Iraq.

At a GCC meeting last year, OPEC members Saudi Arabia, Kuwait, Qatar and the United Arab Emirates and non-OPEC Oman and Bahrain agreed to cut production to raise prices that had plummeted to their lowest in decades.

Saudi Arabia and oil giants Venezuela and Mexico then backed major production cuts that were later endorsed by the 11-member Organization of Petroleum Exporting Countries, driving prices up to record highs.

Following today's meeting, the Saudis are scheduled to meet March 2 with Mexico and Venezuela. Whatever accord is reached will then be forwarded to OPEC at a March 27 meeting in Vienna, officials have said.

The focus of that meeting will be whether to keep the current global oil supply restraints beyond March 31, when OPEC's current agreement expires, or to increase output now to cool a bullish oil market.

By ANWAR FARUQI, Associated Press Writer

-- Old Git (anon@spamproblems.com), February 23, 2000

Answers

The market says...

Crude $28.8 (-$0.12)

Gold $305.3 (-$2.4)

-- _ (_@_._), February 23, 2000.

According to this website (http://www.quote.com/quotecom/livecharts/default.asp?symbols=CL00H) the NYMEX Crude closed yesterday at $29.95 per bbl

EXIT 316

-- Exit 316 (exit316@kc-primary.net), February 23, 2000.