Canada's National Energy Board has recommended a $1.33-a-barrel reduction in the price of the top grade of oil it exports to the United States as a result of earlier cuts by Britain, Norway and Nigeria, a board official said yesterday.
Meanwhile, Mexico has announced that it has suspended its sales of natural gas to the United States because of lower demand and an expected drop in prices.
The cut in the Canadian export charge will take effect Nov. 1, unless reversed by the cabinet of Prime Minister Brian Mulroney, said Clifford Brown, chief of the board's industry analysis division. He added that such monthly recommendations are rarely changed by the cabinet.
Canada's announcement added pressure on the Organization of Petroleum Exporting Countries, which holds an emergency meeting Monday in Geneva, to consider its response to the wave of price-cutting.
Earlier this week, eight oil ministers from within and outside the cartel proposed that OPEC slash its production to defend its official prices.
Analysts said chances are about even that OPEC will cut its benchmark price for the second time in as many years. In March 1983, after cuts by Britain and Nigeria, OPEC reduced the price of its reference grade, Saudi Arabian Light oil, to $29 a barrel from $34 a barrel.
"Even if OPEC makes it now without cutting prices , it might not make it through 1985," said Stephen Smith, an energy economist at Data Resources Inc., a private consulting firm in Lexington, Mass.
Smith is predicting OPEC's benchmark will be $1.50 to $2 lower by 1985. That would mean a drop of about 3 cents a gallon on gasoline, if the savings were passed through to consumers.
Meanwhile, Saudi Arabia's oil minister said he is "confident" Nigeria, one of OPEC's members, will rescind last week's unilateral price cut. But sources in the financially troubled West African nation said no immediate price increase is planned.
And in related developments, oil ministers in Iran, Iraq and Oman said yesterday in separate statements that they supported efforts to avoid price cutting.
Canada proposed reducing the U.S. export price of its light crude oil to $27.47 a barrel from $28.80.
Canada, like Britain and Norway, is not a member of OPEC. It ships about 75,000 barrels of light crude daily to the United States, just a fraction of total U.S. imports of more than 5 million barrels daily and well below the daily U.S. oil consumption of more than 15 million barrels a day.
Prices for Canada's daily exports of more than 200,000 barrels of heavy grades of crude oil would remain unchanged under the proposal.
Mario Ramon Beteta, the general director of Pemex, the state oil monopoly, said Wednesday night that Mexico had decided to halt natural gas exports to the United States because it expects prices to drop in January when the U.S. government lifts price controls on more than half of the natural gas produced in the United States.
"Under these circumstances, the U.S. gas companies will only be willing to import Mexican gas at prices sharply below the present ones," Beteta said. "Faced with this situation, Mexico has decided to utilize internally the gas that has been exported until now.
"Given the conditions of the U.S. market, there exist in Mexico more attractive alternative uses of the natural gas than exportation, from a purely economic viewpoint."
Pemex has been exporting gas to the United States for $4.40 for each 1,000 cubic feet and also will be facing stiff competition from Canada. As of Nov. 1, Canada will allow companies to lower their export price for gas under long-term contracts to $3.15 from $4.40 for each 1,000 cubic feet.
Pemex said the halt in natural gas sales would not seriously affect the Mexican economy.