Mexico to raise oil exports by up to 300,000 bpd

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WIRE:03/25/2000 12:43:00 ET Mexico to raise oil exports by up to 300,000 bpd MEXICO CITY, March 25 (Reuters) - Mexico will increase oil output by 200,000 to 300,000 barrels per day (bpd) and wants prices of $25 a barrel through the summer, Mexican Energy Minister Luis Tellez said in an interview with Mexico daily Excelsior published Saturday. The rise, to be phased in gradually, would be less than the 325,000 bpd Mexico withdrew from world markets in a pact agreed with Venezuela and Saudi Arabia last year which helped to drive prices to nine-year highs and expires on April 1.

On the eve of Organisation of Petroleum Exporting Countries (OPEC) talks to decide oil output hikes, Tellez said he would cooperate with other producers to avoid a market crash and looked for an "ideal price" of $25 a barrel.

He said Venezuela and Saudi Arabia had agreed it was necessary to hike exports, but agreement with other producers was required to avoid a disorderly market.

"What we have to weigh with care is an equilibrium between the growth of the world economy, growth in oil demand and maintaining a supply that gives a constant price, rewarding and high, but not excessive," Tellez said.

OPEC meets on Monday to decide the fate of measures which removed more than 5.0 million bpd from world supply to avert a price slide. Mexico, the world's fifth biggest producer, is not a member of OPEC but will send observers to the crucial meeting in Vienna.

Mexico has already hinted that it might go it alone as of April 1 if OPEC does not pump more oil, and state energy monopoly Pemex has been asking customers how much they will buy from next month.

Tellez told Excelsior if OPEC agreed to return 3.0 million bpd to parched markets, the price would slide to an average of $21 a barrel in the fourth quarter of this year.

OPEC is close to raising output by 1.0-1.5 million bpd, a senior Gulf official said on Saturday.

Mexico has proposed a mechanism to gradually increase output from April 1 and keep oil at an average of $25 a barrel, basis West Texas Intermediate (WTI), Excelsior said. WTI was quoted at around $28 a barrel on Friday.

Such a price would maintain economic growth in consumer countries like the United States and profits for producers, Tellez said.

http://abcnews.go.com/wire/World/reuters20000325_806.html

-- Martin Thompson (mthom1927@aol.com), March 26, 2000


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