OPEC Cuts Unlikely to Stop Slide in Oil Prices : Petroleum: At issue in the Geneva talks was Saudi Arabia’s determination to hold on to the larger share of the cartel’s production it got during the Gulf crisis.

Disgruntled OPEC oil ministers Saturday reached agreement on production cuts that are likely to please no one so much as drivers at the gas pump.

Hoping to boost low oil prices in a world market awash in crude, the ministers settled on an output ceiling of 22.98 million barrels a day, down from the current 24.4 million barrels--too shallow a cut, industry analysts believe, to keep oil and gasoline prices from falling further.

“They probably failed,” said Philip K. Verleger Jr., an energy economist at the Institute for International Economics in Washington.

“This is very good news for consumers for the next 12 months,” Verleger said, adding that he would expect gasoline prices to fall over the next three months.

Many of the ministers were disappointed at the cartel’s inability to make more dramatic cuts after four tough days of talks in Geneva.

“I don’t think any of us are really satisfied with this,” Indonesian Mining and Energy Minister Ginandjar Kartasasmita told the British news agency Reuters. “All of us really want more, but this is the best we could come up with.”

The production cuts by the 13 members of the Organization of Petroleum Exporting Countries are scheduled to go into effect March 1.

At issue was the determination of Saudi Arabia, the largest producer, to keep much of the larger share of oil production it got when Iraq and Kuwait stopped production last year, during the Persian Gulf crisis. Iran, the second-largest producer, and other OPEC nations wanted much deeper cuts, to raise prices at a time when many of the smaller members are facing economic troubles.

“I think this leaves the bowls a little empty,” said Thomas P. Blakeslee, an energy analyst with Pegasus Econometric Group, a commodities consulting group in Hoboken, N.J.

Iran and others also worry that without larger cuts, the Saudis will be setting a harmful precedent as Kuwait and--someday Iraq--begin producing in quantity again.

“All eyes and ears have been focused on the Saudis,” Blakeslee said, “and whether they would insist on an 8-million-barrel-a-day quota,” discouraging bigger cuts by the entire cartel. The Saudis had vowed not to reduce their production below that figure.

On Saturday, it appeared that they had agreed to a slightly lower output of 7.9 million barrels a day.

Most analysts predicted that oil companies would seize the opportunity to increase their production, making the oil glut even greater.

For one thing, crude-oil storage is cheap at the moment.

“I expect that many companies will take advantage of this because the cost of holding inventories right now is very inexpensive,” Verleger said. This would allow companies to produce now but take advantage of expected higher prices later.

Many analysts believe that a year from now--particularly if production from the former Soviet Union’s oil fields continues to collapse--oil demand will be higher, driving prices up again.

“What OPEC has done is probably given the West another 12 months of breathing space,” Verleger said, “because if you look out to next November and December, demand will probably be substantially greater than production.”

Verleger and others believe that Saturday’s cuts are likely to bring OPEC members back to the table well before the next scheduled meeting in June.

“I’m predicting an emergency meeting by OPEC in March,” Blakeslee said, “when prices move considerably lower. . . . You just haven’t seen the cartel acting like a cartel, making the appropriate reductions.”

Earlier in the week, the ministers had hoped to drop production to 22.5 million barrels a day. Most analysts had believed even that cut would not have avoided lower prices.

Oil is currently selling at about $4 below what the cartel considers its target of $21 a barrel.

OPEC has had difficulty adjusting to the lack of quotas among member nations, which were suspended during the Gulf crisis and subsequent war, as members increased production to make up for that lost from Kuwait and Iraq.