Opec fails to agree output cuts
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Your support makes all the difference.VIENNA (Reuter) - Opec's efforts to prop up weak oil prices by agreeing a plan to slash the group's crude output appeared to be deadlocked yesterday, but members still expressed hope of wrapping up a deal.
The oil ministers, aware that they must slow their pumps to keep prices from sliding in a glutted market, were still labouring over how to work Kuwait back into Opec's system of production quotas, delegate sources said.
Asked what was holding up an accord, one delegate said: 'It's Kuwait, only Kuwait.' Negotiations hinged on persuading the emirate, allowed by Opec to pump at will as it rebuilds from the 1991 Gulf war, to rejoin Opec's quota system and accept a limit on its quickly rising output.
But Kuwait was bargaining hard on an output ceiling. This made it difficult to fix how much production the other producers would have to forgo to bring total Opec volume down low enough to mop up surplus supply.
It also meant that the talks, which the Organisation of Petroleum Exporting Countries had hoped to conclude before oil markets opened today, seemed sure to last for at least another day.
'We are making satisfactory progress and we hope to have it wrapped up by tomorrow,' Opec's president, Alirio Parra of Venezuela, told reporters as day wore into evening. Other officials were less sanguine. 'We are stuck,' one senior delegate said.
All Opec members want to raise prices for their oil to bring in more badly needed revenue. The price of a barrel of benchmark North Sea crude is down to dollars 18.20 from almost dollars 21 in October.
Oil traders say a convincing Opec deal could edge prices higher. But failure to reach a solid accord would send them lower, especially if markets think United Nations economic sanctions bottling up Iraqi exports could soon be lifted.
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