Passage 69 OPEC Decision
OPEC,the Organization of Petroleum Exporting Countries agreed this week to increase oil production.
The increase is aimed at lowering oil prices, which went up after OPEC and several other nations cut production last year
The OPEC agreement is expected to add 1.7 million barrels of oil a day.
That would increase oil supplies more than seven percent.
Nine of the eleven OPEC members agreedd to the increase at a meeting in Vienna.
Iraq is not involved in the plan because of its separate Unigted Nations oil-for-food program.
Iran at first refused to take part in the increase to protest American pressure on OPEC.
However,later Iran said it would also agree to increase production.
Iran is the second largest OPEC producer,after Saudi Arabia.
The United States is OPEC's largest market.
The Clinton administration had called for increases of up to 2.5 million barrels a day to reduce high gasoline prices.
American lawmakers were threatening to punish OPEC if it did not raise production.
Some non-OPEC members also plan to increase oil production.
Mexico will produce 150,000 barrels a day more,beginning saturday
Norway has also agreed to increase production.
And Venezuela said Friday that within a month
it will increase production by 125,000 barrels a day.
The OPEC ministers agreed to a Venezuelan proposal for a system of quick supply changes
to keep prices from rising or falling too much.
At their meeting in Vienna they also elected Venezuela's Oil
Minister Ali Rodriguez as the new president of OPEC.
Mister rodriguez says OPEC will try to keep oil prices between twenty-two dollars and twenty-eight dollars a barrel.
This past Monday,oil prices at the New York Mercantile Exchange
closed at almost twenty-four dollars a barrel.
This is the highest since the Persian Gulf War nine years ago after Iraq invaded Kuwait.
But on Thursday,after the OPEC members agreed to increase production, the price of oil fell below twenty-five dollars a barrel.
President Clinton urged American oil companies to use the savings to lower gasoline prices for the public.
Economists say high oil prices can cause inflation and hurt the economies of many nations.
OPEC supplies more than one-third of the world's oil.
Oil industry experts say it will be at least six to eight weeks before the increased production reaches the public.
Some experts,however,question if the production increase will be enough to satisfy the demand and hold prices down.
They note that many OPEC members already cheat on their production limits by selling more oil than they are permitted.
OPEC ministers will meet again in June to study the effects of the increase