Oil prices fall as O.P.E.C. stays split

Press, 18 April 1986, Page 6

Oil prices fall as O.P.E.C. stays split

NZPA-Reuter Geneva Oil prices fell sharply to a 10-year low yesterday after O.P.E.C. Ministers failed to make any progress on cutting world supplies to support the shattered petroleum market Prices plunged almost 15 per cent after two days of emergency talks by the 13 Organisation of the Petroleum Exporting Countries brought no signs of progress. “We are back to square one” on the divisive question of individual production cuts, one delegate said. “There isn’t any definition yet to the discussions,” another delegate said. Prices were approaching rapidly the SUSIO-a--barrel mark unseen since the mid-19705, compared to almost SUS3O a barrel in November last year. The conference appeared to be paralysed and largely overshadowed by reports of fighting in Libya, an O.P.E.C. member, and uncertainty over the fate of its leader. Colonel Muammar Gadaffi. Delegates said the two hours of talks yesterday were imprecise and had concentrated on broad questions of winter and summer demand rather than specifics, such as which countries must cut supplies. “What was discussed this morning were the same proposals put forward by (Indonesia’s Oil

Minister) Subroto last time,” Gabon's Oil Minister, Mr Etienne Guy Mou-vagha-Tchioba, said. The Ministers suspended nine days of emergency talks on March 24 after failing to find common ground on individual production cuts and agreed only to resume discussion on April 15 after consulting their Governments. The price of Britain’s North Sea Brent oil fell from 6U512.90 a barrel to a low of SUSI 1.20 before recovering slightly. For delivery in July it was selling at SUSIO.BO. Brent, which sold for SUS 26 a barrel in December, is watched closely as a market guide although Britain is not an O.P.E.C. member and refuses to join efforts to force up prices. Several delegates said O.P.E.C. was likely to abandon efforts to agree at this meeting and leave prices at the mercy of market forces until a regular half-yearly meeting in June in Yugoslavia. Too much oil, too little demand and open admission by O.P.E.C. that its members’ production cannot be controlled has driven down prices more than 50 per cent since an O.P.E.C. meeting in early December. Although O.P.E.C. members have an official production ceiling of 16 million barrels a day, Ministers have admitted publicly that production is closer to 17.5 million barrels daily.