Oil nears $US15

Press, 6 February 1986, Page 10

Oil nears $US15

NZPA-AP New York Oil prices tumbled towards SUSIS a barrel in wild trading on Tuesday — the lowest since the late 1970 s — after an O.P.E.C. meeting broke up without devising a strategy to defend the cartel’s share of the oversupplied market. “Put on your hard hat. The sky is falling today,” said Mr Peter Beutel, assistant director of Rudolf Wolff Energy Futures, Inc., a New York commodities futures trader. “There is violent trading back and forth.” On the New York Mercantile Exchange, the March delivery price of West Texas intermediate, the best-known U.S. crude, plummeted to 5U515.44 a barrel from Monday’s close of 5U517.36. In Europe, Brent crude, produced by Britain, traded for

5U515.50 a barrel in the open market, also the lowest this decade. Brent was SUS3O last November.

“The market is continuing its careening tailspin here,” said Mr Andrew Lebow, an oilfutures analyst at Shearson Lehman Brothers, Inc., a New York investment firm. “We’re in a situation where people are just afraid to buy.” It was the latest in a slide that has more than halved prices for a 42gallon (159 litre) barrel of oil since November and caused a decline of more than a third since the year began, aggravating bitter frictions within the 13-member Organisation of Petroleum Exporting . Countries.

“There have been fissures in O.P.E.C. for the last few years, but now they’ve become canyons,” said Miss

Carol Epstein, managing editor of “International Petroleum Finance,” published by the New York firm of Petroleum Analysis, Ltd. Combined O.P.E.C. production is believed to be 18.5M S barrels a day, while the world demand for its oil is about 15.5 M barrels a day. Members have been unable to unite in a strategy to reduce the supply. Uncertainty over the future direction of oil prices intensified after a special O.P.E.C. committee concluded two days of meetings in Vienna. O.P.E.C.’s president, the Venezuelan Oil Minister, Mr Arturo Hernandez Grisanti, said the participants had agreed on ways of attaining what he called a fair market share. But he refused to give details and later admitted: “As yet we do not have a new strategy.”