OPEC to Hold Summit Amid Pressure Over Production

With nations around the globe protesting spiraling oil prices, the Organization of Petroleum Exporting Countries will hold its second summit in 40 years this week under immense pressure to increase production. Originally billed as a feel-good meeting on long-term strategy--and despite repeated claims that OPEC will make no production decisions here--the summit in Caracas that starts Tuesday has become a wild card that could test the cartel’s new-found efforts at solidarity. But during the weekend, world finance leaders raised the heat on oil producer states with dire warnings that all countries, rich and poor, would lose out if “black bullion” prices remained at their highest level since the Persian Gulf War. Amid conflicting signals about the cartel’s willingness to listen, representatives from OPEC member Saudi Arabia and a few other oil-producing nations also signed up to a statement from a Group of 7 meeting in Prague that called for more steps to stabilize oil prices. But President Clinton’s decision to tap strategic reserves to bring a halt to this year’s blistering price rally that ventured ito the $40-a-barrel range and ensure sufficient supplies this winter caused oil prices to fall sharply this morning in early trading in Asia. U.S. benchmark crude futures for November delivery tumbled $1.82, or nearly 6%, to an early intraday low in Asia of $30.86 per barrel, before rebounding to $32.68 by midmorning. The U.S. said it would release 30 million barrels. OPEC earlier this month decided to raise production quotas beginning Oct. 1.