Oil Prices Plummet When OPEC Can’t Agree on Cuts : Per-Barrel Cost Declines to $12; April Talks Set

OPEC oil ministers ended nine days of negotiations today with no agreement on a comprehensive strategy to reverse the oil market decline, and their failure to resolve the crisis sent prices into a fresh dive.

James Audu, a spokesman for the Organization of Petroleum Exporting Countries, said the 13 ministers plan to resume negotiations April 15 in an effort to agree on major cuts in oil production.

Oil futures prices dropped sharply after the adjournment. On the New York Mercantile Exchange the May delivery price of West Texas Intermediate, the main U.S. crude and an important market indicator, dropped to $11.20 a barrel, down $2.74 from Friday’s closing price, before recovering to just over $12.

“There’s a very bearish mood this morning; there’s a very negative feeling right now with panic-type selling,” said Peter Beutel, assistant manager of Rudolf Wolff Futures Inc., a New York commodities futures firm. “It’s crazy right now.”

Further Drop Predicted

Analysts had predicted that without an accord on reducing output, world oil prices would remain near currently depressed levels of about $15 a barrel or could fall even further.

Audu said in a brief official statement that the talks broke off “in order to allow OPEC heads of delegation to consult with their governments as well as with other oil-producing countries.”

He declined to answer questions. The cartel’s president, Arturo Hernandez Grisanti of Venezuela, did not hold the usual news briefing that follows OPEC conferences.

Representatives of the cartel’s members began meeting March 16 to devise a strategy for reversing the dramatic collapse of oil prices from about $30 a barrel four months ago.

Ministers said as they left the meeting in a Geneva that no agreement was reached on any key questions.

Consultation Needed

Fawzi Shakshuki, the Libyan oil minister, said the officials were aiming at an OPEC production ceiling between 14 million and 15 million barrels a day but needed to consult with their governments before resuming the talks. The cartel’s current output is 17 million barrels.

A source in the Ecuadoran delegation confirmed that there had been no agreement on an overall production ceiling or on quotas for the 13 member nations.

“No ceiling, no quotas, no nothing,” he said.

The problem was deciding which members would lower their output and by how much.

Iraq was among the countries resisting the proposed individual output quotas, which in its case would be about 1.2 million barrels a day for the spring period, down from its estimated current rate of 1.7 million daily.

Iraq Won’t Agree

Asked by reporters after Sunday’s session whether he would agree to such a reduction, the chief Iraqi delegate, Ramzi Salman Abdul Hussain said, “No way.”

Iraq and Iran, which have been at war for 5 1/2 years, extended their conflict to Geneva, several sources said.