OPEC oil ministers gathered yesterday to nail down the details of a pact that is expected to raise their crude exports by about 5 to 6 per cent.
The Organisation of the Petroleum Exporting Countries is set to seal the agreement at a conference starting in Vienna later today in an effort to ease high oil prices and avert an economic downturn in the oil importing nations of Asia and the West.
The producers are expected to bridge differences in opinion over how much extra they can afford to pump without sending international markets for their oil into a tailspin.
Saudi Arabia favours an increase of 1.5 million barrels per day (bpd), just over 6 per cent above official quotas while Iran wants to limit the increase to one million bpd, OPEC insiders said.
Gulf Arab producers, including Saudi, started shuttle talks in hotel suites yesterday by calling for a rise of 1.7 million barrels a day - seen as an opening gambit leaving some room to negotiate lower.
The recent reversal in oil prices to $28 a barrel in the US, from a peak of $34 two weeks ago, may have strengthened the case for those that want lower volumes. But Gulf producers are keen not to fall short of adding enough to bring prices back into the $20$25 a barrel range that satisfies both Washington and most in OPEC.
To that end, the cartel also seems likely to agree to meet again in June to see whether additional volumes are needed.
Algerian concerns that any extra oil might send prices sliding appear to have been allayed. Saudi Oil Minister Mr Ali alNaimi, after meeting with his Algerian counterpart Mr Chakib Khelil said: "We and Algeria are agreed on a position."
Mr Khelil spoke on Saturday of a perception that OPEC would offer another 1.2-1.4 million bpd. That leaves only small producer Libya opposed to more oil.
OPEC delegates said recent contacts between Gulf OPEC leaders and President Bill Clinton had settled any last minute reservations about the output hike.
Worried about high gasoline prices and inflationary pressures, the United States sees room for OPEC eventually to open up the taps by three million barrels daily on the 75 million bpd world market. But the US administration is understood to be content with the step-by-step approach signalled by OPEC which would see more oil on the market later in the summer if prices do not cool in the next few months.
Meanwhile, Mexico, OPEC's main non-OPEC ally in limiting oil sales, says it will add 200,000-300,000 bpd.
