Uncertainty Hovers Over OPEC Summit

Ultimately, power in OPEC is wielded largely by Saudi Arabia, which holds the overwhelming majority of the cartel's spare production capacity. That, plus its willingness to trim production to boost prices, makes Saudi Arabia the group's swing producer.

"OPEC is an organization that is supposed to have a big say on the market," said a Saudi government strategist who spoke on the condition of anonymity because he is not authorized to speak for the government. "Instead, it is an organizational front for the policy of one country while giving a lot of publicity to countries that wouldn't get as much attention otherwise."

Other OPEC nations are producing near maximum capacity. War-torn Iraq is far short of its production peak. Its oil minister yesterday said production was up to 2.5 million barrels a day. About a third of Nigeria's production has been shut down by an insurgency. Venezuela's disputes with foreign oil companies and its own oil-patch professionals has led to sagging output. And Iran, due to its stubborn bargaining and international economic sanctions, has been unable to lure foreign expertise and investment to fully exploit its big oil and gas reserves.

Altogether, these developments have sliced at least 2.5 million barrels a day, or about 8 percent, from OPEC output without any organizational decision to restrict production.

The Saudi kingdom, however, is in the middle of boosting its production capacity to 12.5 million barrels a day by 2009, up from 11.3 million. Saudi oil minister Ali al-Naimi says that ample inventories indicate that there is no need to pump more oil now, though some Saudi officials say the kingdom will do that next month anyway to force down prices.

But if OPEC forecasts are wrong and consumption outpaces production, then OPEC could become no different from non-OPEC producers, simply pumping as fast as possible while the price finds a balancing point.

Economists say it is difficult for any cartel to survive for long. Artificially high prices tend to bring suppliers into a market or drive customers to substitute other materials. But in the oil industry, those alternative paths are lengthy ones. New oil supplies take years to find and develop, and they tend to be in more and more difficult places.

Other issues are likely to divert attention from substantive matters at the weekend summit, especially with Ch¿vez in town. Saudi officials say Ch¿vez has long sought to arrange a visit here, and he is coming -- at Saudi expense -- with family members and a delegation of more than 200.

Even without criticizing President Bush, the Venezuelan leader is likely to be provocative. This week, he suggested that OPEC nations set aside tens of billions of dollars to subsidize purchases of petroleum by poor nations. Saudi officials have asked Ch¿vez to keep his remarks on Saturday brief.