NEW YORK — The Organization of Petroleum Exporting Countries, which has been unable in three meetings this year to gain a production accord, may be headed for a fourth failure when it convenes today in Geneva, analysts say.
"This meeting could be a real mess . . . a disaster for OPEC as they produce more and more oil," said Philip Verleger of the Institute of International Economics in Washington. "The meeting could be chaotic as they all want to increase their output and have others cut back," he added.
Verleger estimates OPEC production at close to 20 million barrels per day, with the major producers lifting output in line with financial needs rather than OPEC's agreement in principle to keep output at the fourth-quarter quota of 17.6 million barrels per day.
George Friesen, analyst with Dean Witter Reynolds, also believed that the OPEC meeting would degenerate into a "rehash of old issues with no very positive signs at this moment."
Friesen emphasized that failure of the meeting was almost guaranteed by the need of OPEC members to continue producing oil at a high rate.
"Low oil prices have cut their earnings, and they need to raise output to try to gain some of that back," he said.
Friesen felt that OPEC's lack of success in curbing output had been a "vicious circle" in which the OPEC price war drove oil prices down and cut earnings, thereby forcing producers to raise output beginning a new cycle of even lower oil prices.
"The pain that everyone said would bring them (OPEC) to their senses has not worked," Friesen said.
"Saudi Arabia has not made up its losses in revenues this year, and earnings are probably lower now than for the first half of 1985. They still have no announced budget for the year, which is an unprecedented act in post-World War II Saudi history," he added.
Saudi Arabia's output is estimated at between 5.6 and 6 million barrels per day--well above its output ceiling of 4.35 million barrels.
Friesen said Saudi Arabia was also reported to be chartering tanker space in Southeast Asia and Africa and showed no signs of relenting on its output.
Other OPEC producers, such as Venezuela, are arguing for higher quotas, and others, such as the United Arab Emirate and Iraq, are declining to accept the curbs on their outputs that any accord would require, analysts said.
International oil traders believe that lack of an agreement and unrestrained OPEC production will only serve to weaken oil prices through the end of the year.