Egypt, Venezuela, Mexico Cut Oil Prices

Oil prices unraveled rapidly Thursday as Egypt slashed the price of its best Suez blend by $5 to $14 a barrel and OPEC founder Venezuela lowered its base price for heavy crudes by $1.20 to $10.25 a barrel.

Late Wednesday, Mexico trimmed its oil export prices for U.S. clients by $1.50 to between $13 and $14.50 a barrel, depending on quality. Mexico, which is not a member of the Organization of Petroleum Exporting Countries, is the United States’ largest foreign oil supplier.

Oil prices have not been in the $13- to $14-a-barrel range since early 1979, when the Iranian revolution set the stage for the second OPEC price shock.

“The oil price will crack $10 a barrel on the spot market before it stabilizes in the mid-teens,” said William Randol, analyst at First Boston Corp. in New York. “We’ve got further to go down before the system reacts and we start to see some actions to stem the price slide.”

Since December, world oil prices have plunged to the range of $15 a barrel from an average of $27.50 because Saudi Arabia, OPEC’s principal producer, is flooding the already glutted oil market in a bid to force non-OPEC members to curb their output and prop up prices.

“I think the price drop has been sharper and quicker than even the Saudis might have contemplated two months ago,” Randol said.

OPEC is scheduled to hold an emergency summit in Geneva on March 16, but observers said the 13-nation cartel is still deeply divided over measures to halt the price collapse.

Exxon said it lowered the price it pays for five grades of East-East Central Texas crude oil by $1.25 a barrel, effective March 5.

Effective today, Texaco Refining & Marketing, a unit of Texaco, reported that it lowered the price that it will pay for West Texas Intermediate crude by $2 to $17 a barrel.

Sun Co. dropped its buying price for West Texas Intermediate--the key U.S. crude--by $1 to $15 a barrel. U.S. crude postings have fallen by about $13 a barrel since December to the lowest level in seven years.