OPEC Minister Walks Out Of Emergency Price Talks : Cartel Meets to Decide on Strategy

Oil ministers clashed openly today as OPEC began an emergency session and discussed a pair of proposals that could lead to a cut in the cartel’s base price for only the second time in its history.

The 13 ministers of the Organization of Petroleum Exporting Countries met twice in closed session and said no agreement was reached. They adjourned the talks until Tuesday.

Less than an hour after the conference started, the oil minister of the United Arab Emirates walked out, complaining that Nigeria was “stabbing OPEC in the back” by exceeding its production quota.

Ahmed Zaki Yamani, the Saudi Arabian oil minister, said later that the incident was sparked by a “misunderstanding” between Mana Saeed Oteiba, the minister from the United Arab Emirates, and Tam David-West, Nigeria’s oil minister.

‘I Think It Is Over’

Asked about the incident when he returned for the afternoon session at the Intercontinental Hotel, Oteiba said, “I think it is over.”

David-West, whose country broke ranks with OPEC in October to cut prices on its own to meet competition from Britain and Norway, refused to discuss the matter.

With the outbreak of acrimony adding to existing doubts about OPEC’s ability to act decisively against sliding oil prices, petroleum traders in the United States sent prices of the top domestic crude tumbling below $25 a barrel for the first time since 1979.

Those declines indicated that “the market definitely does not have much confidence in OPEC’s ability to come up with an agreement,” said Andrew Lebow, an oil trading analyst at the New York investment firm Shearson Lehman-American Express Inc.

No Specific Figures

Meanwhile, Qatar’s oil minister, pressed by reporters as to whether OPEC was discussing a cut in its benchmark price of $29 a barrel for Arabian Light crude, said: “We’re thinking about, as a concept, lowering it.” But the minister, Abdul Aziz al-Thani, refused to be specific about any figures under consideration.

Shortly before the meeting started, Yamani told reporters that he expected a small reduction in prices to be agreed on at this meeting.

“If you take the weighted average (price), the adjustment will be just cents,” Yamani said. He declined to be more specific.

The president of the conference, Indonesian Oil Minister Subroto, told reporters at the end of today’s session that Nigeria and Saudi Arabia had submitted separate proposals to narrow the price gap between the cartel’s highest quality crudes and the lower quality blends.

Subroto said the Nigerian plan would reduce the spread to $2 from the current $4, while Saudi Arabia would narrow the gap to $2.90. Conference sources, who spoke on condition they not be identified, said that in either case, they expected the price of Arabian Light to be cut.

The prices currently range from $26.50 a barrel for Arabian Heavy crude to $30.50 for Algeria’s extra-light oil.

Any cut in the benchmark price would be the first since it was reduced to $29 from $34 in March, 1983, in OPEC’s only previous cut. Before the Arab oil embargo in 1973, Arabian Light sold for under $3 a barrel.