OPEC Ministers, Unable to Agree, Suspend Meeting

OPEC ministers, unable to agree on a strategy for reversing a traumatic drop in oil prices, suspended an emergency meeting today for at least one day, reflecting what cartel sources called major disagreements among the 13 members.

Arturo Hernandez Grisanti, energy and mines minister of Venezuela and president of OPEC, said the break was needed to allow the group’s technical experts to reassess the outlook for oil demand.

Grisanti said the ministers of the Organization of Petroleum Exporting Countries will hold informal, bilateral contacts before reconvening in full conference Tuesday.

The meeting’s uncertainty caused nervous trading in the spot and futures oil markets. On the New York Mercantile Exchange, the April-delivery price of West Texas Intermediate, the main U.S. crude, vacillated between $12 and $13 a barrel.

There were unconfirmed rumors that cartel members were close to a production-sharing agreement under which prices would stabilize between $15 and $20 a barrel. It was not clear where the rumors originated, and they appeared to conflict with the atmosphere of uncertainty the session had created so far.

No Pacts, No Proposals

Ramzi Salman Abdul Hussein, acting chief delegate from Iraq, said a consensus favors cutting OPEC production and reinstating output quotas. But Libyan Oil Minister Fawzi Shakshuki said that there have been no agreements and that no proposals have been put forth.

Delegation sources, speaking on condition they not be identified, said the request for a new report from OPEC’s technical experts is a stalling tactic that shows the sharp divisions within the cartel.

“We don’t need more studies,” one source said, noting that a formal oil market report from the experts was submitted to the conference Sunday.

The ministers were divided on the key issue of whether they should abandon the strategy they adopted in December to try to halt the erosion of their oil sales by eliminating curbs on production. The strategy was aimed at forcing non-OPEC oil producing nations such as Britain to cut production.

The strategy so far has succeeded only in cutting oil prices in half, to about $15 a barrel, their most volatile movement since the upward spirals of the 1970s.

Help to West, Crisis for OPEC

The price decline has given a major lift to economies of Western industrialized countries by curtailing inflation but it has cost the OPEC countries billions of dollars and thrown the organization into one of its gravest crises.

While telling reporters that he continues to believe that OPEC can restore order to the oil market, Grisanti acknowledged, “We are very much aware that the situation we have now is not an easy one for OPEC.”