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OPEC Nears Consensus on Boosting Oil Output

Energy: Production is likely to be raised by up to 1.7 million barrels of crude a day. The U.S. hopes for more.

March 27, 2000|From Associated Press

VIENNA — OPEC oil ministers were close to reaching a consensus Sunday on the need to boost output to rein in galloping petroleum prices and mollify the United States and other oil-importing nations.

Although the ministers refused to confirm the size or timing of any such increase, Kuwait's oil minister, Sheik Saud Nasser al-Sabah, said OPEC is likely to raise its official production by as much as 1.7 million barrels of crude a day.

The 11 ministers from the Organization of the Petroleum Exporting Countries are meeting today to decide whether to extend cuts in output made in 1998 and 1999 that have propelled oil prices to their highest levels since the Persian Gulf War.

High prices for gasoline and home heating oil have become a hot political issue in this American election year.

The recent reversal in oil prices to $28 a barrel in the U.S., from a peak of $34 two weeks ago, might have strengthened the case for those oil-producers such as Iran that want lower volumes. But the Gulf producers are eager to secure a deal big enough to ease prices back into the $25 a barrel range that satisfies Washington and most in OPEC.

American motorists now pay an average of $1.59 per gallon for unleaded gasoline, an increase of nearly 60 cents since prices bottomed out at 99.8 cents per gallon in February 1999, according to a Lundberg Survey of 10,000 U.S. gas stations released Saturday.

Analysts warn of possible shortages and $2-a-gallon gas during the peak driving season this summer.

OPEC produces more than 26 million barrels of crude each day, or about 35% of the world's supply.

The U.S. and other oil-importing countries are hoping OPEC will raise production by 2 million to 2.5 million barrels per day. Many industry analysts worry that OPEC won't produce enough to let consuming nations replenish their meager oil inventories and simultaneously meet higher seasonal needs for gasoline.

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