OPEC doesn't need to boost oil output Filed: 05/16/2000

Riyadh, May 16 (Bloomberg)  Saudi Arabia, OPEC's biggest oil producer, said there's no justification for the oil exporters' group to boost crude output next month because current oil prices are satisfactory.

"Looking at the issue positively and objectively at present, we don't see any justification for thinking to increase output at next OPEC meeting in June," Saudi Oil Minister Ali al-Naimi said, according to Saudi Arabia's official SPA news agency. The 11-member group is due to meet in Vienna on June 21.

U.S. Energy Secretary Bill Richardson, who has called on the Organization of Petroleum Exporting Countries to consider boosting output to curtail prices that hit $30 a barrel on Friday, has dispatched his deputy David Goldwyn to the Persian Gulf to meet with some of the region's producers, including Saudi Arabia and Qatar, to discuss future strategy.

The U.S., along with other consumers, including Japan and Korea, is concerned that high oil prices could boost inflation and stunt economic growth in their respective economies. In a U.S. presidential election year, prices have become a topic of debate as American motorists are expected to pay 22 percent more for gasoline this summer than they did last year.

Luis Tellez of Mexico, Venezuela's Ali Rodriguez and Ali Naimi of Saudi Arabia met last week in the northern Mexican resort of Cabo San Lucas to review the impact of an agreement in March to boost output by 1.7 million barrels a day starting April 1 and to discuss future oil strategy.

"The figures which we looked at during our troika meeting in Mexico showed that at this time there's no need for increasing oil production," said al-Naimi.

Target

OPEC agreed in March on a target price of between $22 and $28 a barrel for a group of crude oils that it monitors, a measure now close to $28 a barrel. OPEC plans to boost output by 500,000 barrels a day if the price goes above the upper limit for 20 days and reduce it by the same amount if it goes below the lower limit.

"Oil prices are still in the range set by OPEC. They have not exceeded $28 a barrel so there's no need to consider increasing output," said al-Naimi.

Without more oil, daily world consumption will exceed production by 220,000 barrels in the third quarter and 1.72 million in the fourth, reported the International Energy Agency, a Paris-based energy adviser to some of the world's top oil-consuming states. -0- (BN ) May/16/2000 12:18 GMT $$

AP-NY-05-16-00 0825EDT

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-- Martin Thompson (mthom1927@aol.com), May 16, 2000