05/12 11:49 Crude Oil Back at $30/Barrel as No Extra OPEC Output Seen

By Stephen Voss

New York, May 12 (Bloomberg) -- Crude oil rose 3 percent, touching $30 a barrel for the first time in seven weeks, after oil ministers from Saudi Arabia, Venezuela and Mexico signaled that OPEC probably won't boost production when it meets next month.

No change in output is needed ``given the current market conditions and outlook,'' the ministers said in a statement late yesterday after a meeting in Mexico. Without more oil, daily world consumption will exceed production by 220,000 barrels in the third quarter and 1.72 million in the fourth, the International Energy Agency projected.

``You'll have worries about $2 a gallon retail gasoline again, and talk of sales from the (U.S.) Strategic Petroleum Reserve,'' said William Brown, president of W.H. Brown & Co., an oil consultancy in New York. ``The speed and velocity of this thing is quite frightening.''

Crude oil for June delivery rose as much as 89 cents, or 3.1 percent, to $30 a barrel on the New York Mercantile Exchange, the highest price since March 20. Oil prices are 70 percent higher than a year ago after rallying more than 9 percent this week. Prices fell from a nine-year high of $34.37 a barrel on March 8, after members of the Organization of Petroleum Exporting Countries signaled their intention to boost output in April. Mexico, which isn't a member of OPEC, cooperated in a yearlong plan to restrict production.

In London, Brent crude oil for June settlement rose as much as 85 cents, or 3.1 percent, to $28.30 a barrel on the International Petroleum Exchange.

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-- Carl Jenkins (Somewherepress@aol.com), May 12, 2000

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