
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, September 28, 1993                   TAG: 9309280113
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: GENEVA                                LENGTH: Medium

OPEC AGREES TO CAP PUMPING

Saudi Arabia, the world's largest oil producer, came under pressure to freeze its crude oil production Monday after OPEC set an overall production cap in an attempt to drive up prices.

Ministers of the 12-nation Organization of Petroleum Exporting Countries said they would limit oil production to 24.5 million barrels a day over the next three months. That would hold output to current levels.

Oil prices have fallen to about $6 below the group's target of $21 a barrel, their lowest levels in three years. A barrel contains 42 gallons.

The ministers still must decide production quotas for each nation.

"We have now solved 50 percent of the problem," said OPEC Secretary-General Subroto.

Prices on international oil markets rallied on the OPEC news. But analysts said they were skeptical that the new agreement would be followed.

In the past, the cartel has had trouble getting members to honor their commitments on pumping levels.

The initial price rise "could translate into a stronger increase if they can prove they're sticking to it," said Pierre Terzian, editor of the Paris-based newsletter Petrostrategies.

By holding down production in the October-December quarter, the OPEC nations hope to mop up some of the excess oil on the market.

They are counting on rising demand for oil for the winter heating season in North America and Europe.

In the July-September quarter, the group produced about a million barrels a day over its ceiling of 23.6 million barrels.

Saudi Arabia, which supplies about one-third of OPEC's oil, was under pressure to hold pumping steady at its current quota of 8 million barrels a day, delegates said.

The United Arab Emirates, another key producer, also was considered a likely candidate for a production freeze at 2.2 million barrels a day.

By freezing the production of those two countries, Iran, Kuwait and Nigeria could be given more barrels. All three have been producing above their quotas.

OPEC members are: Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

by CNB