Tuesday, March 25, 1986/The Battalion/Page 9
OPEC meeting ends; oil prices slide
Cartel fails to agree on cut in oil production
ie$
d
3
■sident
)f per-
inday,
te en-
I pack-
ovem-
honed
at tht
ers of
red re-
regime
e than
londu-
search
s indi-
jan at-
an any
ous at-
■r Rob-
ila said
onday
tch for
it on a
d and
saying
would
r Sand-
omthe
uppon
errillas
fire, bi-
icgotia-
:r Bob
ters he
a per-
ney.
i to 80
xrsal to
idinista
ong bi-
Associated Press
GENEVA — A marathon OPEC
meeting broke up Monday after the
cartel’s members failed to agree on
how to cut oil production in an at
tempt to reverse the slide in prices.
The collapse of the tumultuous
talks sent open-market oil prices into
a dive, although industry analysts
said OPEC still had a chance of
pushing prices back up if it agreed
later on deep cuts in production.
The price of the most popular
grade of U.S. crude plunged more
than $2.50 a barrel to just over $1 1
in early trading on the New York
Mercantile Exchange.
A one-sentence OPEC statement
issued at the close of the meeting
said oil ministers from the 13-mem-
ber Organization of Petroleum Ex
porting Countries planned to meet
again on April 15 to resume the ne
gotiations.
The Geneva talks lasted nine days
and marked one of the longest con
ferences in the cartel’s history.
The final session ended in tur
moil, with the OPEC president, Ar
turo Hernandez Grisanti of Venezu
ela, and many other ministers
slipping out of the hotel without re
sponding to reporters’ questions.
The usual post-meeting news con
ference by the cartel president was
canceled with no explanation.
Fawzi Shakshuki, the oil minister
of Libya, said the ministers were
aiming at a production ceiling of be
tween 14 million and 15 million bar
rels a day. They currently produce
about 17 million barrels daily.
All 13 member countries have
concluded that their best chance of
reverse the price slide is to cut pro
duction in order to dry up the world
oil glut.
OPEC experts estimate that the
cartel is pumping about 2 million
barrels a day more than the market
can absorb. Demand for oil is ex
pected to fall even more in the com
ing few months.
Philip Verleger, an oil analyst at
the consulting firm of Charles River
Associates in Washington, said he
expected open-market oil prices to
hover in the range of $10 to $12 a
barrel unless OPEC regrouped and
reached a decision on significant
cuts in its oil production.
Oil company chief says oil prices will rise by year's end
Associated Press
LOS ANGELES — The head of
[Chevron Corp. predicted Monday
[that foreign producers will reverse
falling oil prices by summer and that
prices will rise by more than 50 per
cent by the end of the year.
Separately, a General Motors
[Corp. executive said methanol will
be the fuel of the 21st century and
urged the oil industry to begin
i adapting now, adding, “Only those
who are stuck in old thinking will
perish.”
Chevron Chairman George Keller
|and GM Vice Chairman Howard
Kehrl made their comments to the
[annual meeting of the National Pe
troleum Refiners Association.
Both men warned that the United
[States remains in danger of again be-
Hng held hostage by the Organizaion
(of Petroleum Exporting Countries
unless the United States reduces its
dependence on imports.
Keller urged the government to
impose stiff fees on imported oil that
fis subsidized by foreign govern
ments.
“It’s very important for the fed-
feral government to use its powers
“We believe that, in the
long run, windfalls and
wind storms blow no real
good. ”
— Howard Kehrl, vice
chairman of General Mo
tors Corp.
under the General Agreement on
Tariff and Trade to insure that ev
eryone is playing on a level field,”
Keller said.
However, Keller opposed a pro
posal for a general import levy on
foreign oil. Others in the industry
support a general levy, contending it
would allow domestic producers to
charge higher prices, thus making it
profitable for them to continue
costly exploration and encouraging
consumers to conserve fuel.
Oil prices have sky-dived from
about $30 a barrel in November to
about $13 a barrel, forcing most ma
jor oil companies to slash explora
tion budgets by 30 percent or more
as consumers switch from economy
cars to gas guzzlers.
Keller predicted OPEC “will reach
some sort of agreement on prices”
by summer. He forecast crude oil
prices of about $20 per barrel by
year-end.
He also took a swipe at proposals
to eliminate some of the industry’s
most coveted tax breaks, including
investment credits and lengthening
the amount of time required to de
preciate capital expenses.
“If we ever hope to
achieve pre-OPEC stabil
ity in America, we must
cut the string . . . on our
energy price yo-yo. ”
— Howard Kehrl.
“All of these would have the effect
of blighting the prospect of growth
and renewal for America’s heavy in
dustries,” Keller said. “Many of
is
provi<
MewmaHi
nguishcd
>n to his |
where he •
-lustier." |
;’s awards [
dvance of j
Board ol j
ary 0s®
illiant alt
ers, w 110
:ture win-
; 1 for the
an Award
t and "hh
g others."
. pickford,
"g
lour
uble
i ed-
guaf
gptioP
skills
read
is thafl
m
h26
T exas ASM
Flying Club
COME LEARN TO FLY WITH US
Interested people are urged to attend our meeting
March 25 at the Airport Clubhouse.
For more information
Call Don Read 696-9339
7:30 P.M.
SPRING
SALE
MARCH 24-APRIL 6
Waist)))\Bdskef
FOR INFORMATION
CALL 846-1013
402 TARROW
them, like refining, have not yet r e
covered from the last downturn in
our economy.”
Kehrl termed cheap oil “ill winds”
that help automakers in the short
run by increasing sales, but threaten
the energy industry and banks and
raise the specter of renewed depen
dence on oil imports in the long run.
Keller and Kehrl offered differ
ent solutions to meeting federal fuel
emission standards.
Keller suggested new controls
could be instituted by automakers,
while Kehrl suggested that gasoline
marketers bear most of the burden
but only be required to impose the
controls in regions that have the
worst smog and in the worst smog
season.
Keller also opposed a House plan
that would increase the nation’s
toxic-cleanup Superfund by $1 I bil
lion over the next five years by plac
ing most of the costs on the oil indus
try, favoring instead a Senate
version that would boost the fund to
$7.5 billion over five years and
spread the costs to all manufactur
ers.
Procrastination
leads to taxation.
An urgent message from Merrill Lynch: If you don’t open
an IRA by April 15, there’s no time left to procrastinate.
For those of you who have contemplated opening an
IRA, but keep putting it off “until tomorrow,” your
“tomorrows” are running out.
April 15 is just around the corner.* And if you don’t
open an IRA soon, you’ll miss out on a very important
tax break.
Our knowledgeable Financial Consultants will show
you how a Merrill Lynch IRA is not just a tax savings,
but a plan that allows for flexible investments. With
a choice of over 50 investment opportunities, your
IRA can be specifically tailored to your needs. From
fixed-income securities to emerging growth stocks
to government securities.
So hurry. Call the number below, mail the coupon
or come down to Merrill Lynch today. And don’t put
off ’til tomorrow what you should do today.
409-776-5636 or 1-800-433-4462
i 1
Mail to: Merrill Lynch, Pierce, Fenner & Smith Inc.
3131 East 29th Street, Stanford Court, Bldg. C, Bryan, TX 77802
□ Please send me your free Merrill Lynch IRA brochure.
Name
Address.
City
.State-
Business Phone.
.Home Phone.
-Zip_
Merrill Lynch customers, please give name and office address of your
Financial Consultant:
An eligible IRA must be established and your contribution made before April 15, 1986.
©Copyright 1986 Merrill Lynch, Pierce, Fenner & Smith Inc. Member SI PC.
Merrill Lynch
JU MSC
Wiley Lecture Series
U.S. Interventionism:
Resolving
International Conflict
April 1, 1986
8:00 p.m. — 10:00 p.m.
Gerald R. Ford
Former President of the
United States
Jimmy Carter
Former President of the
United States
Dr. Stephen Ambrose
U.S. Foreign Relations
Specialist, Author, Rise to
Globalism
George Will, Moderator
Pulitzer Prize Winning
Columnist
James Earl Rudder Auditorium, Texas A&M University
Tickets: MSC Box Office (409) 845-1234 • Ticketron
Student
Non-Student
Zone 1 Zone 2
$10 $ 8
$12 $10
MasterCard and VISA accepted.
Zone 3
$6
$8
Call Battalion Classified 845-2611