-Caveat Lector- WJPBR Email News List [EMAIL PROTECTED] Peace at any cost is a Prelude to War! OPEC Members to Cut Output by 4 Percent Saturday, March 17, 2001 E-mail This Story VIENNA, Austria — The world's major organization of oil-producing nations on Saturday agreed upon stiff reductions in how much oil they will produce, in hopes of raising prices for crude. Organization of Petroleum Exporting Countries members will cut 4 percent of their targeted oil output — which amounts to about 1 million barrels a day starting April 1, or double the most analysts predictions. The cartel hopes the decrease in oil supply will keep prices steady even as oil prices begin their traditional seasonal dip and the world suffers an overall economic slide. "The present weaker world economy and the traditional sharp downturn in demand associated with the second quarter both clearly point to the need for a correction in oil supply, and the conference has taken the decision to stabilize the oil market," OPEC announced after a two-day Vienna conference. The decision will affect the daily lives of people in the United States and other oil-importing nations. The cartel's members pump almost 40 percent of the world's oil and their product can be found in everything from the gasoline used to power cars, the oil to heat homes and even the plastic in some children's toys. In Washington, D.C., the Bush administration said it was disheartened with the decision and that it further showed the need for more domestic production. "In light of the current world economic conditions, OPEC's decision ... is disappointing," Energy Secretary Spencer Abraham said in a statement. The action "demonstrates the importance of increasing America's domestic production and developing a national energy policy that will ensure a stable, reliable, affordable and diverse supply of energy." Because hotly competing OPEC members typically overproduce, some analysts said the actual decrease in oil production could be as little as half the official number. Unlike previous OPEC meetings in recent years, this one unfolded against a backdrop of economic fragility, with stock markets from New York to Tokyo registering steep losses Consumer confidence has suffered, and fears of a recession are growing. "We have to follow continuously this situation," OPEC secretary general Ali Rodriguez told a news conference. "The slowdown in the economy was entirely present in our analysis." The unusually long time it took OPEC to reach a decision attests to the difficulty delegates faced in working out the specifics. OPEC will trim its output quota to 24.2 million barrels a day from its current level of 25.2 million barrels. Markets were closed Saturday, but they had surged higher, then retreated Friday on the likelihood of a cut. Contracts of light, sweet crude for April delivery closed at $26.74 a barrel, up 19 cents, on the New York Mercantile Exchange. May contracts of North Sea Brent crude ended 4 cents higher at $25.05 on the International Petroleum Exchange in London. Mehdi Varzi, a senior oil analyst at the investment bank Dresdner Kleinwort Wasserstein in London, and Lawrence Eagles, head of commodity research at London brokerage GNI Ltd., were unconcerned with the cuts, saying that after a short rebound in crude prices, they would decline over the next year or two. But Bill Edwards, an energy consultant based in Houston, was worried. "I think OPEC will be surprised at how steeply the price rises," he said. Edwards predicted that crude prices could increase by as much as $6 a barrel and gasoline prices by as much as 30 cents a gallon. But others analysts said markets would react with much less alarm to OPEC's decision. The production cut will be OPEC's second of the year so far. OPEC members agreed in January to lop 1.5 million barrels off their previous quota, a decrease that took effect Feb. 1. The current global economic weakness appears to have reinforced the case within OPEC for deeper cuts. The organization also was anticipating a slowdown this spring in seasonal demand for heating oil and gasoline as the weather starts to warm in many importing nations. Saudi Arabia's oil minister Ali Naimi said OPEC expects non-OPEC producers such as Russia, Mexico and Angola to cooperate by holding back some of their own oil from the market. Iran's oil minister Bijan Namdar Zangeneh said non-OPEC countries will probably trim their supply by 200,000 barrels a day, but he gave no further details. OPEC is trying to stabilize prices at around $25 a barrel for an average of seven benchmark crudes. The OPEC average price has slid in recent months from more than $30 a barrel. "I think they've done the best they can," Eagles said, calling the challenge of stabilizing prices "an impossible task" for OPEC to achieve on its own. The cut will apply to all of OPEC's 11 members except for Iraq, which does not participate in the group's production agreements because its oil exports are regulated by the United Nations. OPEC said it will meet again in June to assess market conditions at that time. U.S. President George W. Bush has argued that the nation's energy woes can largely be addressed by tapping domestic supplies of fossils fuels such as coal and oil -- despite the hostile reaction of environmental groups to that idea. The administration does not expect to complete its energy plan before the end of March. *COPYRIGHT NOTICE** In accordance with Title 17 U. S. C. 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