OPEC ministers, ending their first day of formal meetings, remained deadlocked over proposals for reunifying world oil prices.
Although OPEC officials continued to hold out hope for an eventual compromise that would ease pressures on high-priced oil producers, the ministers acknowledged they were farther apart on several basic points of pricing policy than they had initially assumed.
"The mountains are higher and the valleys are deeper than we thought," said OPEC council president Subroto of Indonesia, following the first round of official consultations. A second session early this evening adjourned after one hour. The talks are scheduled to resume Thursday and are expected to conclude the same day.
The downing of Libyan planes by U.S. jets appeared to act as an added impetus for some in the group to find a compromise that would demonstrate the unity of the Organization of Petroleum Exporting Countries, to which Libya belongs. But Subroto said the incident was not discussed in the meeting.
On the pricing impasse, Saudi Arabia -- the dominant OPEC producer -- wants $34 per barrel for Arab light crude, $2 more than the Saudis now charge and $2 less than the price charged by most of the other OPEC members. Venezuela has insisted the reference point be set at $36 per barrel.
Also in dispute is where to fix new ceilings for the high-priced African oil producers -- Libya, Algeria and Nigeria. This matter is complicated by what Subroto said were differences in view among the Africans themselves.
At their current official price of around $40 per barrel, all three producers have suffered sharp drops in oil exports due to a slack in worldwide demand and high output by Saudi Arabia of cheaper oil. But Libya and Algeria, which have the financial reserves to withstand these losses in oil revenues better than the more densely populated and poorer Nigeria, are reportedly less willing than Nigeria to narrow the differentials charged for their quality oil.
Even assuming agreement could be worked out on those issues, Subroto indicated there is still disagreement over how long the new prices should hold. Saudi Arabia and Venezuela have advocated price freezes that would last until the end of next year, while more hawkish OPEC producers favor a shorter-term commitment so as to be able to raise prices again should the market tighten.
The general mood at this week's series of OPEC meetings has shifted from tentative optimism to skepticism about reaching a consensus on pricing.
Mana Saeed Otaiba, the United Arab Emirate's oil minister, for instance, told reporters today he was less optimistic about agreement this week. But there appears to be a common sense of need to restore stability and public confidence in a troubled world oil market.
Statements by ministers during the day gave a confusing picture of how the relative positions may be shifting. After clashing yesterday over the central question of OPEC's reference price, Saudi Arabia's Sheik Ahmed Zaki Yamani and Venezuela's Humberto Calderon Berti today hinted a softening of their positions.
But it was not clear from the few comments whether the remarks were meant to tease reporters or to signal a compromise in the making.
It appeared that Venezuela's adherence to the higher benchmark had strengthened the negotiating resolve of some of the Africans, who would be able to keep a higher ceiling for their premium crude if the Saudis could be persuaded to come up to $36 per barrel.
Moreover, as a result of the Libyan shooting incident, the Saudi government was reported by a usually well-informed source to have come under pressure from other Arab heads of government today to raise its price to $36 per barrel for the sake of OPEC unity and as a slap at the United States.
But it has not been Saudi Arabia's practice to make critical decisions about oil in the heat of excitement over something like an unrelated military incident. CAPTION: Picture, HUMBERTO CALDERON BERTI...Venezuela sticking to $36 oil price.