The Organization of Petroleum Exporting Countries is almost certain to increase prices sharply, according to many of the oil ministers gathered here for the cartel's semiannual price fixing meeting Tuesday.
Framed as a measure to restore unity in the world's fractured oil markets, oil ministers and other officials from Iraq, Venezuela, Algeria and the United Arab Emirates have suggested that a prices of about $20 would be acceptable.
"Twenty dollars is the price, that seems to be mentioned the most," said Nordine Ait-Lausussine, an official of Sonatrach, the Algerian national oil company.
An increase in oil prices to $20 a barrel would raise gasoline prices about 5 cents a gallon in the United States. The average selling price for OPEC oil is now about $18 a barrel, up 31 percent since the first of the year. The price for the cartel's so called "benchmark," Saudi light crude, is $14.55 a barrel.
As usual, however, there are splits on the critical pricing decision, and some conference delegates openly speculate that the price could be more than $18 a barrel. As expected, Saudi Arabia's publicly postured position as a "moderate" is at odds with self-proclaimed price hawks such as Libya.
This afternoon Libyan oil minister Ezzedin Ari Mabruk paced through the Intercontinental Hotel lobby calling for the increase to $27 a barrel. "The price of our crude is not real," he said. Libya's position is reportedly not shared by other conference members.
As usual, the meeting's focus is on the Saudis.
If it close, Saudi Arabia could increase production above its current 8.5 million barrel-a-day ceiling to place downward pressure on prices. Since Iran returned to the ranks of the oil exporters, however, Riyadh has not moved to boost production.
The greatest surprise on the eve of the conference came from oil minister Mana Saeed Otaiba of the United Arab Emirates. Otaiba warned in an interview that if the other OPEC producers did not adopt a price of between $18 and $20 a barrel, and United Arab Emirates and Saudi Arabia would consider taking retaliatory action.
"I don't want to threaten any of my colleagues in the OPEC, but if they ask very high prices I will restrict the raising of my prices and maybe look into increasing production," Otaiba said.
The focus of the OPEC meeting is on stabilizing world oil prices and putting an end at least temporarily to the leap-frogging price structure.
Venezuelan oil minister Humberto Calderon Berti Yesterday appealed for a unified priced regime. "The pricing system should be the same for all the countries, the Venezuelan minister said.