By Jonathan Leff
LONDON (Reuters) - Robust oil prices dropped by more than $1 below their recent 10-year high levels on Friday as the market braced for this year's third production hike from OPEC, under pressure from consumer nations to tame prices.
Benchmark Brent crude broke a four-day rising streak which saw it touch new decade highs almost daily, topping levels last seen ahead of Iraq's 1990 invasion of Kuwait. It last was trading $1.15 lower at $33.40 a barrel.
U.S. light crude futures lost $1.01 to $34.38 a barrel.
The contract marked a new 10-year peak of $34.60 late on Thursday after erasing deep losses posted on word that Saudi Arabia had assured President Clinton it wanted more oil.
Early on Friday, with ministers from the Organization of the Petroleum Exporting Countries gathering in Vienna, cartel kingpin Saudi Arabia pledged that the group would work to get prices back to the agreed $22-$28 a barrel price band.
That level should help ease inflationary pressures and lower energy costs for the world's importing nations, who have cried out in anguish at oil over $30 a barrel.
"We hope that the consuming countries will do their part to lower the product prices and lower the burden (on consumers)," Saudi Oil Minister Ali al-Naimi told reporters upon his arrival ahead of Sunday's conference.
OPEC price hawks such as Venezuela and Iran -- recalling the price slump to $10 a barrel just two years ago -- say painfully high pump prices are the result of government taxation and a refinery bottleneck and any output increase should be moderate.
The cartel, which pumps about two-thirds of internationally traded crude, is expected to raise production by at least 500,000 barrels per day due to an automatic trigger mechanism that kicks in when prices exceed $28 for 20 consecutive days.
But Saudi Arabia has pushed for more.
Saudi Crown Prince Abdullah Crown told Clinton on Wednesday that Riyadh was already pumping 600,000 bpd in excess of its official quota, according to a source close to the talks.
The source told Reuters the prince told Clinton he expected OPEC to hike output by three percent or 700,000 bpd, just under three percent from limits now of 25.4 million bpd.
However, some analysts worry that even an increase of that size could be too small to refill depleted Western heating oil stockpiles, which are near historic lows heading into the peak usage Northern Hemisphere winter season.
Although prices have corrected sharply lower on profit taking ahead of Sunday's meeting, traders say new highs may lurk ahead if Western oil stockpiles don't begin filling up.
CONSUMERS IN ANGUISH
Oil consuming nations -- particularly the United States and those in the Europe Union -- have in recent days made plain that OPEC must do something to reverse the surge in prices.
In the U.S., where energy prices are becoming a major issue in the presidential election, Clinton is facing renewed pressure from Congress to unleash supplies from the country's Strategic Petroleum Reserve (SPR) in order to cool the overheated market.
Clinton said he had told Abdullah prices were too high and OPEC should take appropriate action on the issue.
In the UK on Friday, a small group of farmers and truckers blocked access to a refinery in northwestern England to vent their anger over high fuel prices, following the lead of French hauliers who launched a country-wide protest on Monday.
As the French blockade of oil refineries continued into its fifth day on Friday -- forcing severe petroleum shortages in most parts of the country -- negotiators said progress was being made toward a compromise solution with the government.
The truckers were emboldened by the success of French fishermen last week, who won tax cuts from the Social government after blockading ports and stranding thousands of travelers.
The main truckers group urged its members to lift the blockade on Friday, but the second-largest organizers said they were leaning toward continuing the actions.
EU HIT BY DOUBLE WHAMMY
European Union finance ministries are especially keen to see oil prices ease, as the double whammy of high oil prices -- internationally traded in U.S. dollars -- and a record low euro/dollar exchange rate cuts deep.
This year's 15 percent fall in the euro against the dollar has aggravated a 43 percent rise in greenback-denominated crude prices to worsen wholesale energy costs for Eurozone economies.
Euro zone finance ministers meet Friday near Paris and are expected to discuss the decade-high oil prices and how to respond. The European Commission has urged producing countries to guide oil prices back to the $20 a barrel mark.
In Asia, where some governments are struggling to dismantle subsidies on oil, higher prices threaten unrest in some nations.
Finance ministers of the Asia-Pacific Economic Cooperation group are expected to urge oil exporters to unleash new supplies and bring down prices, said a Thai central banker.
South Korea's Finance Minister said earlier that it would take a minimum one million barrel per day hike in order to benefit the country's import-dependent economy.
-- cpr (buytexas@swbell.net), September 08, 2000