SAUDI SUCCESS SEEN IN CURBING OPEC PRODUCTION

  Saudi Arabia will succeed in pressuring
  other members of the Organization of Petroleum Exporting
  Countries to stay within their production quotas, said Morgan
  Stanley Group managing director John Wellemeyer.
      Wellemeyer, speaking to reporters at an offshore oil
  engineering conference, also said he expected OPEC nations to
  attempt to hold prices under 20 dlrs a barrel for several years
  to keep industrial demand for residual fuel oil strong.
      "Over the next few weeks I think you'll see a concerted
  effort by the Saudis to get production down," Wellemeyer said.
      "The Saudis are committed to that price level (of 18 dlrs a
  barrel) and are willing to make it happen again," he said.
      In recent weeks, oil prices fell to the 16 to 17 dlrs a
  barrel level on market reports of some OPE members producing
  above their quota, pushing total OPEC production to 15.8 mln
  barrels per day. But prices rebounded today, with April U.S.
  crude prices up about one dlr to over 17 dlrs a barrel on a
  belief Saudi Arabia is attempting to curb OPEC output.
      Wellemeyer said that sharp declines in U.S. oil production
  could push demand for OPEC oil above 20 mln barrels per day as
  early as 1989 and up to 24 mln barrels per day by 1993.
      Although the projected increases in demand for OPEC oil
  should strengthen world prices, Wellemeyer said he believed the
  organization would hold its official price below 20 dlrs a
  barrel for some time to prevent residual fuel users from
  switching to natural gas supplies. The interfuel swing market
  accounts for about eight mln barrels a day, or 18 pct of the
  world demand for oil.
  

