Qatar Reports Depress World Crude Oil Price

Most oil traded on world markets weakened Tuesday amid reports that OPEC member Qatar is discounting the price of its crude oil and that the 13-nation cartel will consider raising oil production at its next ministerial meeting in June.

In December, the Organization of Petroleum Exporting Countries agreed to cut production by 7.2% to 15.8 million barrels a day for the first half of 1987 in order to raise oil prices to an official average of $18 a barrel. The accord eliminated all forms of price discounts.

In Tokyo, oil industry sources said Qatar, a small Persian Gulf member of OPEC, has sold as much as 5 million barrels of its crude to Japanese customers this week at discounts ranging around 40 cents a barrel.

Qatar has had trouble finding buyers for its oil since OPEC’s official pricing system took effect Feb. 1. The nation’s oil production has plummeted to about 100,000 barrels a day even though its OPEC-assigned quota is 285,000 barrels daily.

Analysts said selling also escalated after United Arab Emirates Oil Minister Mana Said Oteiba, in an interview with the newspaper Al-Ittihad in Abu Dhabi, said OPEC will discuss increasing its production ceiling at the June meeting in a bid to capture a larger share of the international oil market.

OPEC ministers are scheduled to open their regular semi-annual summit June 25 in Vienna.

The Emirates, which already is exceeding its quota of 902,000 barrels a day, warned earlier this week that it would be forced to ignore the current OPEC agreement unless it is allowed to produce more.

The emerging economic rivalries within OPEC dampened the recent burst of optimism that the cartel would be able to hold production at current levels and maintain official prices despite some infractions by maverick members.

On the New York Mercantile Exchange, West Texas intermediate, the benchmark U.S. crude, dropped 14 cents to $19.27 a barrel for immediate delivery. The crude closed at $19.41 a barrel Monday, its highest finish in nearly 16 months.

On the U.S. Gulf Coast spot market, where oil is sold to the highest bidder, West Texas intermediate lost 15 cents to $19.20 a barrel.

Unleaded gasoline for June delivery on the Merc lost 0.32 cent to 53.83 cents a gallon and home-heating oil fell 0.40 cent to 51.66 cents a gallon.

On the European spot market, Britain’s North Sea Brent crude slipped 5 cents to $18.60 a barrel. But the UAE’s Dubai light, a key OPEC crude, gained a 5 cents to $17.05 a barrel.