NZoom> Oil prices rose above $US30 a barrel on Thursday as Opec producers Saudi Arabia and Venezuela prepared to seek assurances from non-member Mexico that it would follow the cartel in any move to tighten supply.

A meeting on Friday in Madrid between Saudi Oil Minister Ali al-Naimi and his counterparts, Venezuela's Rafael Ramirez and Mexico's Ernesto Martens, comes just days before next Wednesday's Opec meeting in Qatar to decide third-quarter cartel production.

The three countries were the architects of drastic oil output curbs in 1998 and 1999 which laid the groundwork for a five-year price boom, and are regrouping to prepare the ground for the resumption of Iraq's oil exports.

US crude futures jumped 69 cents to $US30.74 a barrel, nearing Wednesday's six-week peak of $US31. In London, benchmark Brent crude was 63 cents higher at $US27.44 a barrel.

"They aren't meeting to ask the Mexicans to pump more oil. So the question will be if they get Mexico to agree to cut," said a New York trader.

Iraq earlier on Thursday announced it was tendering to sell 10 million barrels of crude stored at export terminals, its first oil sales since the US-led invasion in mid-March.

Baghdad is aiming for some 1.5 million bpd of production by the end of this month, over half of that set for export, although continued looting in the southern region is hampering efforts to restart supplies, an official there said Wednesday.

"We believe that the market will continue to be surprised at the slowness of output recovery in Iraq and by the length of time before the security situation allows for a stabilisation of Iraqi capacity," said Paul Horsnell, an analyst with JP Morgan.

A full recovery to its previous over two million bpd exports - some four percent of globally traded oil - appears distant.

Some analysts believe Opec could opt to postpone any further cut in supplies as prices remain above its $US25 a barrel target, analysts say.

"Prices being where they are, we don't think they will do anything," said Leo Drollas at London's Centre for Global Energy Studies.

On Wednesday, Indonesian Energy Minister Purnomo Yusgiantoro said no cut was necessary as long as prices stayed within the group's $US22-$US28 price band. The Opec basket price stood at $US26.72 on Wednesday.

Oil markets have now recovered most of their losses following US governmentdata showing an unexpected rise in crude and gasoline supplies on Wednesday, somewhat easing concerns of a potential summer supply crunch.

Crude oil stocks jumped 2.8 million barrels in the week to May 30 while gasoline supplies rose 2.3 million barrels, the Department of Energy's statistical arm said.

Crude supplies are still down 11% against last year's levels, while gasoline is down 5%.

Thursday, June 5, 2003 06:41 PM ET CARACAS -(<a href=www.quicken.com>Dow Jones)- Oil ministers of Venezuela, Mexico and Saudi Arabia will gather Friday in Madrid to discuss current world oil markets and cooperation of non-OPEC oil producing nations, a spokeswoman of the Oil Ministry said Thursday.

Venezuela's Oil Minister Rafael Ramirez was earlier Thursday quoted as saying he would meet his Saudi Arabian counterpart Ali Naimi and Mexico's Ernesto Martens in the Spanish capital Monday, June 9. "The meeting is Friday afternoon, " the spokeswoman said, adding the three would start their meeting at 1800 local time.

The spokeswoman added Ramirez will travel to Norway on Monday to meet his Norwegian counterpart. Ramirez is set to arrive in Doha in Tuesday afternoon.

Oil ministers from the three countries have met on a regular basis during the past few years in an effort to coordinate oil output policy. Mexico, a major non-OPEC member, has been cooperating with OPEC.

The meeting of the three oil ministers comes just before the Organization of Petroleum Exporting Countries, or OPEC, meets in Doha, Qatar, June 11. OPEC has to decide whether to curb production in an effort to anticipate the return of Iraqi oil exports.

OPEC in April decided to hike the ceiling to 25.4 million barrels a day while at the same time, it pledged to remove 2 million b/d from the market.

By Fred Pals, Dow Jones Newswires; 58414-2887461; fred.pals@dowjones.com

<a href=www.nzherald.co.nz>The New Zeland Herald 06.06.2003 8.30am

NEW YORK - Oil prices rose above US$30 a barrel on Thursday (New York time) as Opec producers Saudi Arabia and Venezuela prepared to seek assurances from non-member Mexico that it would follow the cartel in any move to tighten supply.

A meeting on Friday in Madrid between Saudi Oil Minister Ali al-Naimi and his counterparts, Venezuela's Rafael Ramirez and Mexico's Ernesto Martens, comes just days before next Wednesday's Opec meeting in Qatar to decide third-quarter cartel production.

The three countries were the architects of drastic oil output curbs in 1998 and 1999 which laid the groundwork for a five-year price boom, and are regrouping to prepare the ground for the resumption of Iraq's oil exports.

US crude futures jumped 69 cents to US$30.74 a barrel, nearing Wednesday's six-week peak of US$31. In London, benchmark Brent crude was 63 cents higher at US$27.44 a barrel.

"They aren't meeting to ask the Mexicans to pump more oil. So the question will be if they get Mexico to agree to cut," said a New York trader.

Iraq earlier on Thursday announced it was tendering to sell 10 million barrels of crude stored at export terminals, its first oil sales since the US-led invasion in mid-March.

Baghdad is aiming for some 1.5 million bpd of production by the end of this month, over half of that set for export, although continued looting in the southern region is hampering efforts to restart supplies, an official there said Wednesday.

"We believe that the market will continue to be surprised at the slowness of output recovery in Iraq and by the length of time before the security situation allows for a stabilisation of Iraqi capacity," said Paul Horsnell, an analyst with J.P. Morgan.

A full recovery to its previous over two million bpd exports -- some four per cent of globally traded oil -- appears distant.

Some analysts believe Opec could opt to postpone any further cut in supplies as prices remain above its US$25 a barrel target, analysts say.

"Prices being where they are, we don't think they will do anything," said Leo Drollas at London's Centre for Global Energy Studies.

On Wednesday, Indonesian Energy Minister Purnomo Yusgiantoro said no cut was necessary as long as prices stayed within the group's US$22-US$28 price band. The Opec basket price stood at US$26.72 on Wednesday.

Oil markets have now recovered most of their losses following US government data showing an unexpected rise in crude and petrol supplies on Wednesday, somewhat easing concerns of a potential summer supply crunch.

Crude oil stocks jumped 2.8 million barrels in the week to May 30 while petrol supplies rose 2.3 million barrels, the Department of Energy's statistical arm said.

Crude supplies are still down 11 per cent against last year's levels, while petrol is down five per cent.

<a href=www.menafn.com>MENA-FM.com - Khaleej Times - 05/06/2003

ABU DHABI - Ministers from member states of the Organisation of Petroleum Exporting Countries will hold the annual meeting of the Opec Fund in Abu Dhabi next week. "This will be the first time the Opec Fund meeting is hosted by the UAE and this region," a spokesman for the UAE ministry of finance and industry said.

Ministers from the UAE, Saudi Arabia, Qatar, Kuwait, Venezuela, Algeria, Libya, Indonesia, Iran and Nigeria will be present for the June 11 meeting, which will discuss, among other things, funding new projects. A representative from Iraq is likely to participate. With a capital of $3.435 billion, the Opec Fund granted 953 loans totaling $ 5.146 billion until the end of last year.

Meanwhile, a Qatari oil source said in Bahrain that Opec won't change its production level of 25.4 million barrels a day, which took effect June 1, when it meets next week in Qatar because Opec basket price is within its set range and Iraq situation is still unclear. "There's no point in changing production now... there's no talk about increasing or cutting production," he said. Opec is scheduled to hold an extraordinary meeting in Doha on June 11 to set its production policy and to review the situation in Iraq.

Reuters, 06.05.03, 5:52 AM ET By Tom Ashby

LONDON, June 5 (Reuters) - OPEC may pull back from a heavily signalled output cut at a meeting next week because prices have stayed higher than ministers expected, but many oil market analysts still see the cartel tightening its belt soon.

Prices have pushed up towards the upper end of OPEC's target range of $22-$28 per barrel over the past few weeks, but analysts see OPEC oil flows sparking a price-busting stock-build in the third quarter unless it cuts output soon.

OPEC ministers said in April they were ready to trim their output ceiling of 25.4 million barrels per day (bpd) by up to two million bpd at the June 11 meeting in Qatar to make room for Iraq, but the rally has dampened the likelikood.

"Our numbers point to a needed cut of 1.4 million bpd in the third quarter, but prices being where they are, we don't think they will do anything," said Leo Drollas at London's Centre for Global Energy Studies.

Indonesia and Venezuela have both said this week that OPEC need not cut while its export basket remains towards the top end of the target range of $22-$28 per barrel. The basket stood at $26.72 on Wednesday.

Tor Kartevold, special adviser on trading strategy to Norway's Statoil <STL.OL>, said this could be too short-term an outlook. Including a modest stockbuild of 600,000 bpd to 1.0 million bpd in the third quarter, Kartevold pegged the demand for OPEC crude excluding Iraq at 24-24.5 million. OPEC output, excluding Iraq, stood at 26.6 million bpd in May, according to a monthly Reuters survey.

"OPEC needs to cut by about 1.5 million barrels per day to avoid an excessive stock build in the third quarter," Kartevold said, forecasting a recovery of Iraqi output to 1.5 million bpd in the third quarter, versus current output at half that level. If prices stay where they are, Drollas said OPEC might stay its hand on June 11, and call an additional meeting in July when Iraqi output is more certain.

However, not all analysts shared this view.

Mike Rothman at Merrill Lynch expects demand on OPEC oil to be much stronger in the latter half of the year, partly to replenish low inventories.

"OPEC quotas will need to be left as is, with the 25.4 million bpd ceiling basically meeting market requirements for the third quarter period, provided Iraq does return to the market on the order of 1.5 to 2.0 million bpd," he said.

Iraq announced its first post-war crude oil exports on Thursday, and Iraq's de facto oil minister, Thamir Ghadhban, expects to reach a production of 1.5 million bpd by mid-June. Heavy looting and suspected sabotage at Iraqi oilfields has delayed the recovery of the industry.