Iran still reluctant on oil production

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Iran still reluctant on oil production Monday, 13 March 2000 20:08 (ET)

Iran still reluctant on oil production By HIL ANDERSON

LOS ANGELES, March 13 (UPI)-- Iranian oil officials have reiterated their caution over OPEC committing to significant increases in oil production.

In separate weekend interviews, two Iranian officials were reluctant tocommit to the increase that is likely to relieve tight supplies that have boosted crude oil prices to around $30 per barrel and sent U.S. gasoline prices soaring.

The OPEC cartel meets March 27 to decide whether to extend or to modify the production cuts that were agreed upon about a year ago to prop up crude prices that were barely $10 per barrel at the time. Thegroup had agreed to reduce their output by 1.7 million barrels per day.

Crude on the New York Mercantile Exchange was up 26 cents Monday to $32.02 per barrel, a relatively small increase compared to the more volatile market increases of recent weeks. May went up 16 cents to $30.00 per barrel while June moved only 6 cents.

April NYMEX wholesale gasoline reached the $1 per gallon level Monday before settling at 99.11 cents.

Retail gasoline prices also continued catapulting up at the pump. The Energy Information Administration said Monday that the average pump price for a gallon of regular unleaded ended last week at $1.527 cents per gallon compared to $1.501 cents the previous week. The average for all grades of gasoline climbed to $1.566 from $1.539 per gallon; in California, it is becoming common to see premium gasoline priced precariously close to $2.00.

In an interview with the Iranian news agency IRNA, Fereydoun Berkeshli, a Vienna-based Iranian oil expert, said seasonal fluctuations in the market would cause world oil demand to fall from nearly 77 million barrels of oil per day to around 74.3 million barrels in the second quarter, a decline of 3.2 million barrels per day.

Berkeshli also called the reports of low oil inventories in the United States unreliable, and said oil companies had stockpiled extra supplies as a precaution against Y2K disruptions.

"Statistics on oil stocks of these countries are not reliable and we mustwait for secondary statistics to be announced," he said.

The IRNA interview conducted Saturday was made available Monday by OPEC's Opecna news service.

The Financial Times reported Monday that Hossein Kazempour Ardebili, Iran's representative on the OPEC board, said OPEC should increase production by 500,000 barrels per day only if the averaged price of the seven types of crude exported by the 11 OPEC members averages around $29 per barrel.

The United States has reportedly been urging OPEC to boost production by 2 million barrels per day. Most OPEC nations have indicated they will go along with some kind of increase, but industry analysts don't expect the increasesto be sizable enough or early enough to bring much relief to motorists this summer.

Gasoline sticker shock has taken on a political aspect with the most immediate proposal at hand being a suspension of a 4.3-cent federal gasoline tax.

The proposal has received some public support from lawmakers, but the American Road and Transportation Builders Association, which represents companies involved in road construction, said the tax revenues are earmarked through the Highway Trust Fund for "badly needed" highway improvement projects

The association said the average motorist would save about $26 per year if the tax is repealed, but the loss of gasoline tax revenues coupled with a 24.4 cent per gallon rollback on diesel taxes will cost the Highway Trust Fund some $10.3 billion, leading to the cancellation of projects and endangering the jobs of road crews, equipment builders and asphalt makers.

"The HTF is not a 'slush fund' that should be manipulated for political expediency," Association President Peter Ruane said in a release.

http://www.vny.com/cf/News/upidetail.cfm?QID=70991



-- Martin Thompson (mthom1927@aol.com), March 13, 2000


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