500,000 barrels in way of OPEC deal

By JAMES MCLEAN
Updated: 18:00 EST, 27 March 2000

About 500,000 barrels of oil a day are thought to stand between ministers from the Organisation of Petroleum Exporting Countries reaching an agreement to increase the world's oil supply during a second day of talks in Vienna today.

The cartel, which produces 40% of the world's oil, must settle differences between Gulf producers led by Saudi Arabia and other members, primarily Iran.

Steve Turner at HSBC said: 'It's all a bit indecisive with the Saudis wanting to increase production by 1.7 million barrels a day and the others looking for nearer 1.2 million.

'I think this meeting has proved more difficult than expected, with some resentment among the Opec hawks about attempts by the US to influence Opec strategy.' The US has lobbied its allies within the organisation to step up production from the 23 million barrels a day set last March.

Since then supply has tightened, prices hitting nine-year highs at more than $30 per barrel.

Opec opponents in the US Congress stepped up the pressure overnight with calls to release some of the country's vast Strategic Petroleum Reserves.

Iran, supported by smaller members such as Libya, says a large production increase could see prices plummet as more Iraqi and Mexican oil is already set to hit the market. Brent crude for April delivery was quoted at $25.44 overnight as the market awaits an Opec decision.