OPEC WANTS 18 DLR OIL PRICE - OAPEC OFFICIAL

  OPEC believes world oil prices should
  be set around a fixed average price of 18 dlrs a barrel, OAPEC
  Assistant General Secretary Abdelaziz Al-Wattari said today.
      In a speech to a European Community (EC)/OAPEC/OPEC seminar
  in Luxembourg released here, Al-Wattari said: "OPEC believes
  ...The world energy trade should be kept without restrictions
  and should be built around a fixed average price of 18 dlrs."
      But he warned that defense of the 18 dlr a barrel level had
  caused hardship for OPEC countries, who had been forced to
  curtail production, and he warned that such cutbacks by OPEC
  states could not be sustained in some cases.
      "For OPEC to stabilize the world oil price at what is now
  considered the optimal level of 18 dlrs a barrel, its member
  countries have had to undergo severe hardship in curtailing
  production," Al-Wattari said.
      "Such cutbacks ... Cannot, in certain cases, be sustained,"
  Al-Wattari said. As well as financial and marketing pressures,
  some states depended on associated gas output for domestic use
  and oil cutbacks had left insufficient gas supplies, he added.
      Al-Wattari noted that total OPEC output was below the
  organization's agreed ceiling for all member countries in
  February, although this had meant sacrifices.
      The effect of these sacrifices meant that market stability,
  though restored to a good level, was still under pressure,
  Al-Wattari said. "A lasting stability in the world market
  requires a wider scope of international cooperation," he added.
      He said some non-OPEC oil producing countries had shown a
  political willingness after 1986 to cooperate with OPEC.
      But although cutbacks announced by these states were
  politically significant and welcomed by OPEC, they were
  insufficient in terms of volume, he added. "The overall majority
  of non-OPEC producers have not responded sufficiently to OPEC's
  calls for supply regulation," he said.
      Al-Wattari said an 18 dlr a barrel price was optimal as it
  allowed investment in the oil industry outside OPEC to
  continue, while not generating excessive cash flow for
  otherwise unviable high-cost areas outside OPEC. Such a price
  would no longer encourage protectionist measures, he added.
      Fadhil Al-Chalabi, OPEC Deputy Secretary General, also
  addressing the seminar, added that discipline was still needed
  to prevent violent fluctuations in the oil market.
      Cooperation between Arab states and Europe was advantageous
  for both sides, Al-Chalabi said, adding he hoped cooperation
  would ultimately lead to full-fledged Euro-Arab dialogue.
  

