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OPEC May Reconsider Its Price, Production Policies

October 08, 1987|Associated Press

KUWAIT — Two ministers of the Organization of Petroleum Exporting Countries indicated Wednesday that the 13-nation group's oil price and production policies could be changed at its next full conference scheduled to be held in December.

Nigerian Oil Minister Rilwanu Lukman, who is also the OPEC president, and Kuwaiti Oil Minister Sheik Ali Khalifa al-Sabah said that the group's total oil production ceiling of 16.6 million barrels a day and its benchmark price of $18 a barrel could be adjusted at the December meeting.

Their statements came as Saudi Arabia, the biggest producer in OPEC, denied news reports that it was selling crude oil below the group's official prices.

Reports Tuesday quoted industry sources as saying that Saudi Arabia has begun linking the prices of a large volume of its crude sales to prices prevailing in the spot market.

Prices Sink

The reports sparked a sharp drop in oil prices. On the New York Mercantile Exchange, the November delivery price of West Texas Intermediate, the key U.S. crude, fell 38 cents to close at $19.44 per 42-gallon barrel in its first major move in weeks.

On Wednesday, the November delivery price of West Texas Intermediate rose 22 cents to close at $19.66 per barrel.

The Saudi newspaper al-Sharq al-Awsat reported earlier this week that OPEC might raise its benchmark price to $19 a barrel at the next biannual ministerial meeting in December.

Lukman, along with Venezuelan Oil Minister Arturo Hernandez Grisanti and Indonesian Oil Minister Subroto, are members of a panel entrusted by OPEC to monitor the adherence of member countries to their official production quotas. The three, who arrived in Kuwait on Wednesday from Saudi Arabia, are touring OPEC member countries in the Gulf regions. They are accompanied by acting OPEC Secretary-General Fadhil al-Chalabi.

Agreement Sought

The tour has the aim of asking OPEC member countries to support a new agreement, which is being drafted and will be presented to the December meeting, Lukman told reporters before the delegation's departure for the United Arab Emirates.

Lukman said one of the major obstacles facing the meeting is "what to do with the current benchmark price of $18 a barrel--whether to raise or reduce it."

Earlier Wednesday, Kuwaiti ruler Sheik Jaber al-Ahmed al-Sabah assured the OPEC panel that Kuwait will continue to adhere to its official production quota of 996,000 barrels a day as long as other member countries abide by their quotas, sources said.

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