OPEC Still Unable to Reach Agreement

OPEC failed again Sunday to clinch an elusive agreement on oil output quotas, needed to achieve its goal of driving up petroleum prices, and the cartel’s oil ministers said they would resume their meeting today.

“We haven’t found a solution yet,” said Algerian Oil Minister Belkacem Nabi, who told reporters about problems over the allocation of production quotas to replace a current output restraint agreement that expires October 31.

Saudi Oil Minister Ahmed Zaki Yamani, asked how soon it would be before an agreement is reached, said: “I wish you could tell.”

A plenary session of the conference of the Organization of Petroleum Exporting Countries, scheduled for Sunday evening, was postponed to this morning, officials said.

Iranian minister Gholamreza Aghazadeh earlier said the chief obstacle was a demand by Kuwait, which Saudi Arabia backs for a 10% rise in its output quota.

But delegates said several other less wealthy states were also asking for higher quotas now.

Failure to strike a bargain here would send prices down from around $14 a barrel, oil traders say. OPEC wants to drive them up to between $17 and $19.

In the prevailing glut, OPEC does not want to raise the present ceiling on output to more than 17 million barrels daily from 16.8 million to accommodate rival demands to sell more oil.

Delegates expressed optimism that an agreement to limit production and raise prices could eventually be achieved. The conference, in session since Oct. 6, set a record for longevity after ending its 14th day of meetings.

But they were worried that demands for higher quotas by some states could encourage other countries to do the same, creating a bandwagon effect that would wreck chances of an accord, leading to uncontrolled output that would send oil prices crashing.

Ecuadorean Oil Minister Javier Espinosa said the reason for the postponement was a lack of progress on quotas.

“I think things reached a point where, before sitting down (in ministerial session), there should be an agreement. Otherwise, it’s not worth sitting down,” he told reporters. He declined to say what the main sticking point was. “I think you all know,” he said.

Other delegates said Ecuador, Gabon, Nigeria, Qatar and possibly Venezuela were also seeking to be alloted a little more output from the extra 200,000 barrels per day which it is proposed to add to the OPEC ceiling.

Yamani expressed solidarity for his Persian Gulf ally Kuwait in an interview with the Al-Watan newspaper published today.

He said that if OPEC failed to reach an agreement to limit its output here, then prices, instead of being driven to OPEC’s goal of around $19 dollars by January, would simply crash.