Tuesday, November 29,1988
The Battalion
Page?
EA
er
World/Nation
3PEC agrees to cut output,
raise per-barrel price to $ 18
S/IENNA, Austria (AP) — OPEC The price of West Texas Interme- Feredoon Barkeshli, senior Ira- steps will be taken to try to kee
pinisters ended nearly two weeks diate for January delivery still man- nian delegate, said, “I’m happy prices up and countries from chea
tense discussions Monday with a aged to settle up $1.06 per barrel at about it.” ing on their quotas. Past OPE
Inal agreement to limit produc- $15.03. Iran, which until the agreement agreements have unraveled whe
n and pump prices back toward A pickup in crude prices — if it had vowed never to permit Iraq an the members cheated by exceedir
Iropping the I
e.
;r clippings
ic are used to ]
s for agents, wli
loss of the cocaine]
ington, legal din
American Civil Li
the DEA tactic da (jon and pump prices back toward
ty of the entirecr® cartel’s benchmark of $18 per
n- Brel.
But before the day was out, one
;m only works beoHminister indicated his new quota
Harrington said l as uo t official, causing prices to
koff after a sharp run-up.
he accord, which ended the win
meeting of the Organization of
roleum Exporting Countries, set
[output ceiling of 18.5 million bar-
a day for the 13 OPEC mem-
s, well under the 22.5 million that
sts estimate the cartel is cur-
ury looking at
idering if he was*]
me greater goal.”
m acknowledged
the tactic may mem
ffective.
also be easier
arch houses i
out warrants," he
; a constitutionals
vhat they are mi
s say the scams
ions about govern!
the news mediauij
rs and broadcast
have the resotirtt
i formation releaseal
nent officials and
e value, Paul Pat
r of KPRC-TVin
y pumping.
he agreement also resolved a
I issue in the talks by giving for-
|r combatants Iran and Iraq equal
tasof 2.64 million barrels a day.
fter the agreement was an-
nced, futures prices for West
(xas Intermediate, a major U.S.
nd, jumped as high as $15.80
lars a barrel, up more than $1.80
m its close last week on the New
irk Mercantile Exchange,
ut prices slipped toward the end
|the day after the oil minister of
United Arab Emirates, said the
but level set in the accord was not
I official ceiling.
The price of West Texas Interme
diate for January delivery still man
aged to settle up $1.06 per barrel at
$15.03.
A pickup in crude prices — if it
holds — could mean higher gasoline
prices at the pump, although oil
companies do not necessarily pass
along the full increase.
Each one dollar rise in the price of
crude oil theoretically means a
pickup of 2.5 cents a gallon in retail
gasoline prices.
The agreement takes effect Jan. 1
for six months. OPEC President Ril-
wanu Lukman of Nigeria predicted
prices could reach $ 18 a barrel
“maybe by June.”
“I wouldn’t mind it tomorrow,” he
told a news conference, “but it’s not
possible.”
He said that if the countries cut
their production as required, prices
will get a strong lift.
Saudi Arabia’s oil minister, Hi-
sham Nazer, predicted the accord
will have a very positive effect on the
oil market.
Indonesia’s oil minister, Ginand-
jar Kartasasmita, predicted the $18
mark could be reached by next win
ter.
“It’s a victory for OPEC,” Issam
Abdul Raheem al-Chalabi, oil min
ister of Iraq,said.
Feredoon Barkeshli, senior Ira
nian delegate, said, “I’m happy
about it.”
Iran, which until the agreement
had vowed never to permit Iraq an
equal quota, had a cap of 2.4 million
under the cartel’s previous
agreement and Iraq, 1.5 million.
Iran retains its 14.27 percent
share of total OPEC output under
the new accord. Iraq has the same
portion.
Other countries, however, lost a
bit of their share to Iraq.
Saudi Arabia, the world’s largest
exporter, was given a 24.5 percent
share of total output, compared to
26.2 percent previously. Its daily
quota will be 4.52 million barrels, up
from 4.34 million barrels.
The new agreement promises
steps will be taken to try to keep
prices up and countries from cheat
ing on their quotas. Past OPEC
agreements have unraveled when
the members cheated by exceeding
their ceilings.
The statement by Mana Saeed
Otaiba, the United Arab Emirates
minister, hinted at early trouble with
the agreement. But Paul Mlotok, an
analyst at Salomon Brothers in New
York, said the statement “shouldn’t
surprise anyone” because of the
country’s repeated overproduction
in the past.
He said he expected the
agreement to hold.
“There’s going to be one main
cheater (the United Arab Emi
rates),” he said.
Pledge stretches
Soviet grain trade
with U.S. until ’90
ew prime rate marks
lighest level since ’85
and those whichsBNf^ YORK (AP) — Major U.S.
he cat to be on. b oostet l their prime lending
ntlv arrived in !W ea P ercent age point Monday
lesson is easiest 110.5 percent, the steepest level
ving tables andco®
ice mid-1985 and the fourth rise
jsyear.
The increase will mean a jump in
:es on a variety of consumer loans
gged to the prime, including
me-equity loans. It also will raise
trowing costs for companies that
yon banks for Financing.
Economists had been predicting a
ime rate increase because interest
:es in the bond markets rose re-
itly due to inflation fears and the
liar’s weakness in foreign ex-
ange markets.
mtrol puiiishmen!ii^ e financial markets had no ma
ul technique forcat'B react i°n to the announcement,
s very important an( f bond prices were up mod-
plant sprayer wJty’ while the dollar steadied
ty problem cats. I»i| ainst other ma i or currencies,
s may want to carrl h c °mes as no surprise,” said Ed-
with them throMll 1 ^ Yarclen '> chief economist for
so that when thee e investment Firm Prudential-
ehe Securities Inc. “In fact, they
anks) seem to have held back
agerthan I expected.”
food that the cat
uld be a reward aiii
rage the behavior
be made uncomfoi
ces, a plastic cover a
ting, warmth am
im age the use ofk
itions. Thus, malat
tically uncomfortaHt
;• desirability of star
eg or attacks.them,
nised.
Federal Reserve Board Chairman
Alan Greenspan also has warned of
higher short-term rates unless the
government trims its huge budget
deFicit, the source of the dollar’s
woes.
“There’s a building perception in
the marketplace that the Fed i|, in
fact, tightening conditions,’’said Wil
liam V. Sullivan, an economist for
the investment Firm Dean Witter
Reynolds Inc.
Sullivan and other economists
predicted the Fed might soon raise
its discount rate, or the interest it
charges on loans to member banks.
If that happened, the prime rate
could be increased again, they said.
“I’d look for something (from the
Fed) in the next two weeks,” Yardeni
said.
Chase Manhattan was the First in
stitution to increase its prime rate
Monday, and other major banks
quickly joined the move.
The prime stood at 8.5 percent at
the start of the year and has been
raised four times since.
WASHINGTON (AP) — Soviet
and American trade negotiators
agreed Monday to extend through
1990 an agreement calling for the
Soviet Union to buy at least 9 million
metric tons of grain a year from the
United States.
The 27-month extension signed
in Moscow revived a five-year pact
that expired Sept. 30 and appeared
designed in part to synchronize the
E urchases with Soviet President Mik-
ail Gorbachev’s blueprints to mod
ernize agriculture.
“The extension will continue to
stabilize grain trade between the two
countries, benefiting American
farmers,” Agriculture Secretary
Richard E. Lyng and U.S. Trade
Representative Clayton K. Yeutter
said in ajoint statement.
Under the plan, the Soviets
pledged to buy at least 4 million met
ric tons each of wheat and corn an
nually as well as 1 million metric tons
of additional wheat, corn, soybeans
and soybean meal, or any combina
tion of those commodities. It also al
lows them to purchase up to 3 mil
lion metric tons of additional wheat
and corn annually without further
discussions.
A metric ton is equal to approxi
mately 2,205 pounds.
A feature of the plan, also con
tained in the expired version, allows
to the Soviets to count two bushels of
soybeans or soybean meal as one
bushel and'thus round out their pur
chase obligation by buying 500,000
tons of those commodities rather
than a million tons of wheat or corn.
Initial reaction from farm groups,
which have been expecting some
thing similar for more than a week,
was positive.
“In general our impression is fa
vorable,” American Farm Bureau
Federation spokesman Joe Fields
said. “It’s a continuation of what we
had before, which worked fairly
well.”
Barry Jenkins, a spokesman for
the National Association of Wheat
Growers, said his understanding is
that they are pleased that we have a
new agreement.
He said, however, the extension
was likely to affect wheat prices less
than lingering problems caused by
the drought and that markets mainly
would be relieved to get some assur
ance that Soviet demand would re
main undiminished.
Criticism of the deal, however,
came from Rep. Dan Glickman, D-
Kan., chairman of the House Agri
culture subcommittee on wheat, soy
beans and feed grains.
“We’ve done nothing more than
maintain the current agreement,”
Glickman said in a statement. “This
administration has driven down the
price of grain in order to export
more, but they don’t seem to be able
:o close the deal.”
Britain, France ask U.S. to grant Arafat visa
r also can hide am
cat to jump on art
:e of furniture oi
ething behind tin
ast. When the
it is punished ifr
owner does not
now the act ofgtilUNITED NATIONS (AP) — If
cratching the fun (le United States doesn’t reverse it-
ng the punishment |lfin48 hours and grant PLO chief
nee of the owner.A Isser Arafat a visa so he can ad-
y of the problemdt less the General Assembly, the
the number of Iota Ddy will convene in Geneva to hear
es, the squirt guiro Um, Arab nations said Monday.
' can be left nearM “We have a message of peace that
K want to bring to the General As-
to “No” training
st, normal behavioti
ut can be modified
jmbly through Chairman Arafat,”
Zuhdi Labib Terzi, U.N. ob-
rver for the Palestine Liberation
lesson is most effc ganization.
The United States is imposing
ime obstacles that would impede
sy access, so we have to do it some-
as soon as the ft >ere else,” he told reporters.
The Arab nations, outraged by
tronment is ne
ehe pet/owner
rd, a punishmeit
liller
f
NFIDENCf
xtbooks
Credit Cards
the U.S. decision to deny Arafat a
visa, met Monday and decided that a
planned session on the Middle East
should be moved to Geneva, proba
bly in December.
Diplomatic sources said the na
tions had agreed they would first call
on the General Assembly to con
demn the U.S. move and appeal to
Washington to reconsider. U.S. offi
cials in Washington have said the
visa decision is irreversible.
Arab League Ambassador Clovis
Maksoud told a news conference
that “if ... in 24, 36 or 48 hours at
the latest, if there is no reversal, we
will have no option but to go to a
country which respects its obliga
tions to the United Nations.”
Also Monday, the U.N. Commit
tee on Relations with the Host Coun
try met to hear complaints from
Arab nations and other countries
such as Britain, France, China, and
the Soviet Union against the U.S.
move. Britain and France were
among those urging the United
States to reconsider.
On Saturday, Secretary of State
George Shultz denied Arafat’s re
quest for a visa on the grounds the
PLO chief has condoned acts of ter
rorism.
Under a 1947 Headquarters
Treaty with the United Nations, the
United States is not to impede the
transit or work of U.N. diplomats or
guests. It may, however, deny visas
on grounds of national security.
Arafat called the U.S. move “a
sheer violation of the international
law and the U.N. charter” and
claimed Washington was ignoring
international backing for the inde
pendent state of Palestine, pro
claimed earlier this month by the
Palestine National Council, the
PLO’s parliament-in-exile.
“Why are they afraid that I speak
to world public opinion and explain
the new Palestinian decisions?” Ar
afat said to reporters in Baghdad,
Iraq.
ClN^!x OOIONjjJ
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