OPEC expected to slow oil flow-- Emergency meeting called because prices for gas winding down

Posted on Thu, Apr. 24, 2003 By Ken Moritsugu The Beacon Journal-Knight Ridder Newspapers

WASHINGTON -The good news is gasoline prices are not expected to rise much this summer. The bad news is they might not fall either.

A recent slide in gasoline prices might be winding down because major oil-producing countries are expected to announce production cuts Thursday and the peak U.S. driving season is about to begin.

The Organization of Petroleum Exporting Countries is holding an emergency meeting in Vienna, Austria, to decide how much to rein in production.

The national average price for a gallon of regular unleaded dropped 15 cents in the past five weeks to $1.57 a gallon, in large part because OPEC flooded the market with crude oil to offset the loss of supply from Iraq during the war. Gasoline is even cheaper in much of the South, but more expensive on the West Coast.

Now, OPEC is worried that a glut of oil might develop and cause a collapse in prices.

The price of crude oil fell to $26.65 a barrel Wednesday on the New York futures market, as the Energy Department reported that record oil imports last week pushed up U.S. inventories by 9 million barrels. A barrel is 42 gallons.

Just how much to cut remains a bit of a guessing game for the OPEC oil ministers. One uncertain factor is how soon Iraqi oil will return to the market. Other question marks include how quickly Nigeria and Venezuela will return to full production after political unrest that disrupted their oil operations.

Oil market analysts expect OPEC to curtail production by somewhere between 1 million and 2 million barrels a day and to revisit the issue at its next meeting on June 11. The OPEC nations are pumping more than 26 million barrels daily.