Mon, 15 May 2000

U.S. calls OPEC to keep open mind

SAN DIEGO, California (Dow Jones): U.S. Energy Secretary Bill Richardson Friday called on members of the Organization of Petroleum Exporting Countries to keep an open mind about crude output when they meet next month to discuss third quarter action.

At a press conference following the fourth APEC energy ministers' meeting, Richardson said that the price of oil approaching $30 a barrel would be too high if it were sustained.

"If prices stay at that level, it is clearly too high," Richardson said, but he added that the current buildup in stocks was "a good sign."

Richardson said he was sticking to an earlier prediction that U.S. gasoline prices would falter around $1.40 a gallon.

Mexican Energy Minister Luis Tellez reiterated comments made earlier Friday that producers continue to seek stability in the oil market.

Tellez met in Mexico this week with his Saudi and Venezuelan counterparts, Ali Naimi and Ali Rodriguez. Rodriguez is the president of OPEC.

The three issued a statement saying they were satisfied with the April output increases made by OPEC and non-OPEC producers, and believe no further actions are needed at this time.

At a later press conference, Richardson said he plans to continue with diplomatic efforts such as those that he said contributed to producers' decision to raise output in April.

"The quiet diplomacy worked. I will be in touch with OPEC ministers and will not rule out travel," Richardson said.

He added that he plans to meet Sunday in San Diego with OPEC president Rodriguez.

Richardson shrugged off suggestions that he may have worn out his welcome among some OPEC members following his efforts before the March meeting.

"This is an important issue to American consumers, so I'm going to remain engaged," Richardson said.

Producing nations Saudi Arabia, Venezuela and non-OPEC Mexico said Friday that they were satisfied with current oil prices -- a sign that OPEC was not leaning toward increasing production when it meets on June 21.

Crude oil futures rallied briefly to $30 a barrel for the first time in seven weeks on the New York Mercantile Exchange

"This is an issue important to the American consumer," Richardson said. A price of "30 a barrel is a bit too high."

Richardson said he's been "in constant touch" with the Saudi, Venezuelan and Mexican oil ministers.

"I understand the concerns of oil-importing countries," Indonesian Mines and Energy Minister Susilo Bambang Yudhoyono said. "Indonesia continues to study oil prices and at the next meeting, we will consider all factors to determine whether we have to revise the March decision."

In March, OPEC repealed a yearlong agreement to cut output by 1.7 million barrels a day. Daily output from all 11 members -- including Iraq, which has no quota -- rose by 850,000 barrels to 27.56 million barrels in April.

In London, oil prices climbed above the 28-dollar level here Friday, a day after key oil producers dismissed a further output increase in June and as the New York price hovered near US$30..

The price of Brent crude for June delivery was $28.28 dollars per barrel, compared with $27.45 late Thursday.