OPEC expected to raise output -- slightlygreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
From today's edition of USA Today.
OPEC expected to raise output -- slightly
By Dina Temple-Raston
An oil producers' meeting in Austria on Monday could have a profound effect on your summer vacation plans.
That's when the Organization of Petroleum Exporting Countries gathers in Vienna to set production targets for the next six months, which will play a major role in determining the price of gasoline during the height of the summer driving season.
''The smart money says they will provide enough oil to prevent starvation but not enough to make anyone think they've been well fed,'' says Bill O'Grady, oil analyst at A.G. Edwards in St. Louis, who expects gas prices to climb 4 cents to 6 cents a gallon in coming months.
OPEC members have hinted that they would be willing to boost oil output by 1 million to 2 million barrels a day over last year's quota. What's unclear is whether the extra oil will be added to OPEC's 23 million-barrel target or to the amount it actually produced, about 24 million barrels, analysts say.
The International Energy Agency, a government-backed adviser to 24 of the world's largest oil-consuming nations, says OPEC needs to boost its current daily output by 2.3 million barrels to meet rising demand and replenish depleted oil supplies.
In the meantime, U.S. gas prices keep rising. A gallon of regular gas hit a nationwide average of $1.53 this week. New York oil prices reached a nine-year high of $34.37 a barrel on March 8 and have been trading more recently in the $27 range.
OPEC members have said they are aiming for a price target between $20 and $25 a barrel, a range economists say won't spark inflation. It's also a level that won't stifle demand and push customers to look for other energy supplies.
Perhaps the biggest surprise over the past year has not been higher gas prices, but rather that OPEC, rarely able to stick to production agreements in the past, has largely adhered to the target it set last year.
''Usually, they are like a bunch of baseball owners and can never agree,'' O'Grady says. ''This is the first modicum of success they have had as a cartel in 15 or 20 years.''
-- (email@example.com), March 25, 2000