OPEC MAY HAVE TO MEET TO FIRM PRICES - ANALYSTS

  OPEC may be forced to meet before a
  scheduled June session to readdress its production cutting
  agreement if the organization wants to halt the current slide
  in oil prices, oil industry analysts said.
      "The movement to higher oil prices was never to be as easy
  as OPEC thought. They may need an emergency meeting to sort out
  the problems," said Daniel Yergin, director of Cambridge Energy
  Research Associates, CERA.
      Analysts and oil industry sources said the problem OPEC
  faces is excess oil supply in world oil markets.
      "OPEC's problem is not a price problem but a production
  issue and must be addressed in that way," said Paul Mlotok, oil
  analyst with Salomon Brothers Inc.
      He said the market's earlier optimism about OPEC and its
  ability to keep production under control have given way to a
  pessimistic outlook that the organization must address soon if
  it wishes to regain the initiative in oil prices.
      But some other analysts were uncertain that even an
  emergency meeting would address the problem of OPEC production
  above the 15.8 mln bpd quota set last December.
      "OPEC has to learn that in a buyers market you cannot have
  deemed quotas, fixed prices and set differentials," said the
  regional manager for one of the major oil companies who spoke
  on condition that he not be named. "The market is now trying to
  teach them that lesson again," he added.
      David T. Mizrahi, editor of Mideast reports, expects OPEC
  to meet before June, although not immediately. However, he is
  not optimistic that OPEC can address its principal problems.
      "They will not meet now as they try to take advantage of the
  winter demand to sell their oil, but in late March and April
  when demand slackens," Mizrahi said.
      But Mizrahi said that OPEC is unlikely to do anything more
  than reiterate its agreement to keep output at 15.8 mln bpd."
      Analysts said that the next two months will be critical for
  OPEC's ability to hold together prices and output.
      "OPEC must hold to its pact for the next six to eight weeks
  since buyers will come back into the market then," said Dillard
  Spriggs of Petroleum Analysis Ltd in New York.
      But Bijan Moussavar-Rahmani of Harvard University's Energy
  and Environment Policy Center said that the demand for OPEC oil
  has been rising through the first quarter and this may have
  prompted excesses in its production.
      "Demand for their (OPEC) oil is clearly above 15.8 mln bpd
  and is probably closer to 17 mln bpd or higher now so what we
  are seeing characterized as cheating is OPEC meeting this
  demand through current production," he told Reuters in a
  telephone interview.
  

