Iran, Libya and Algeria Oppose Oil Production Boost

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Monday, March 6, 2000

Oil Production Boost Opposed

TEHRAN, Iran--International oil markets are not facing a shortage and there is no need to raise production to bring prices down, representatives of Iran, Libya and Algeria said Monday.

"Given the fact that world oil demand will decline in the second quarter by more than 3 million (barrels per day), they believe that OPEC member countries can maintain their current production ceiling beyond March 31," said the statement by the heads of the delegations to an upcoming OPEC meeting.

The statement contrasts sharply with those from other oil producers in recent days and foreshadows a possible dispute on March 27 when the Organization of Petroleum Exporting Countries meets to decide new production quotas to replace those that expire four days later.

Saudi Arabia, Venezuela and Mexico, a leading non-OPEC ally, said last week that producers need raise oil output to ease soaring gasoline and heating oil prices.

Iran, Libya and Algeria are among OPEC's hard liners. They dispute contentions that the world is facing a critical oil shortage that could severely cut into economic growth.

"All market parameters have failed to prove a crude shortfall in the second quarter of 2000 due to a seasonal drop in demand," said Iranian Oil Minister Bijan Namdar Zanganehas, who was quoted by the official Islamic Republic News Agency following the joint statement with the other nations.

Zanganeh said prices, which have topped $30 a barrel recently, will experience a downward trend in coming months. He said Iran was looking for market stability and wants to safeguard the long-run interests of both oil producers and consumers. Western consuming countries, primarily the United States, have urged oil-exporting countries to raise production in the second quarter, which begins in April. Monday's statements helped push oil prices to new highs in New York trading.

West Texas Intermediate crude for April delivery rose to as much as $32.20 a barrel before settling up 67 cents at $32.18 -the highest closing price since Nov. 29, 1990.

The increase was also prompted by news that Norway's state-owned Statoil has reduced output from its North Sea fields due to bad weather that has limited loadings and left storage facilities almost full. In addition a Nigerian oil workers' strike has interrupted loadings in that country.

http://www.latimes.com/wires/20000306/tCB00V0346.html

-- Martin Thompson (mthom1927@aol.com), March 06, 2000


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