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OPEC Agrees to Keep Output High : Energy: But the cartel puts off a decision on what to do when demand for oil eases in the spring.

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From Associated Press

OPEC ministers adopted a plan Wednesday to keep pumping oil at capacity this winter, but they avoided the tough question of what to do when demand falls in the spring.

That may be the first time since Iraq’s invasion of Kuwait last year that the oil cartel has to confront the thorny issue of who has to cut back crude production and by how much.

Some members of the 13-nation Organization of Petroleum Exporting Countries fear that prices will plunge unless output is sharply reduced in the May-June quarter, when demand normally drops.

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After several hours of private bargaining, the ministers agreed to meet Feb. 12 to assess the situation.

“It will be a very difficult meeting,” Indonesian Oil Minister Ginandjar Kartasasmita said. “Our main concern is to prevent a collapse of the market.”

The group’s new president, Nigerian Oil Minister Jibril Aminu, will call an earlier meeting if crude prices plunge.

Some ministers said it is too early to decide about spring production because of uncertainties about economic growth in oil-consuming nations. Also, there are questions about the future production of Iraq and Kuwait.

Industry analysts say that, with Iraq and Kuwait largely on the sidelines since the Persian Gulf crisis, the ceiling of 23.65 million barrels of oil a day is near the cartel’s capacity. So far, OPEC has also been able to avoid the issue of what to do when Kuwait and Iraq resume large-scale pumping.

For now, some market analysts said the new agreement could keep oil prices steady at least into the new year. Others, however, predict that prices could continue a decline that began last month.

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Still others said prices could even rise if the weather is colder than normal in the United States and other industrial countries or if the Soviet Union, the world’s largest producer, experiences further problems with its oil industry. Soviet output has been falling because of mismanagement and outdated equipment.

Since the Iraqi invasion of Kuwait in August, 1990, which led to a United Nations boycott of Iraqi and Kuwaiti crude, the other OPEC states have been pumping as much oil as possible.

The ministers are deeply divided over how to allocate reductions.

Smaller producers would oppose any move to force an across-the-board cut on them. But the big producers would likely balk at taking most of the trims.

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