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Oil price slump continues
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July 5, 2000: 11:59 p.m. ET
OPEC president says it will boost production only if all members agree
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NEW YORK (CNNfn) - Crude oil prices stabilized late Wednesday after falling for most of the day as OPEC President Ali Rodriguez insisted the cartel will raise production only after full consultations and the agreement of all members.
London Brent blend for August delivery settled at $29.38 a barrel, down 20 cents after hitting a low of $28.55 on London's International Petroleum Exchange. U.S. light crude oil futures settled at $30.67, down $1.83 a barrel on the New York Mercantile Exchange.
But NYMEX crude oil futures rose 13 cents to $30.80 in after-hours trade after a report from the American Petroleum Institute that U.S. oil inventories slipped last week.
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CNNfn's Tom Bogdanowicz reports on the latest developments as crude oil prices decline.
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Rodriguez, who is also Venezuela's energy and mines minister, said Wednesday he had been assured by OPEC Secretary General Rilwanu Lukman that Riyadh won't boost production alone.
"The OPEC secretary general informed me officially yesterday that there was no idea by any country to raise output unilaterally," Rodriguez said. "We all continue to share what has been a longstanding practice in OPEC to take decisions unanimously and after consultation."
Nevertheless, Rodriguez said that "if the price stays above $28 (a barrel) for a long time, OPEC would take actions."
Oil prices have been under pressure since Saudi Arabia surprised the market late Monday by announcing it will increase production by 500,000 barrels a day in an effort to bring prices down to around $25 a barrel.
Fellow OPEC members were briefed by telephone Tuesday. Although some are resisting the plan, OPEC's biggest producer, Saudi Arabia, appears certain to pump more crude within days.
Among OPEC's 11 members, the United Arab Emirates, Kuwait and Algeria appear likely to join the Saudis in the overall 500,000 barrels-a-day increase, OPEC sources said.
Industry analysts said they were not surprised other members may join. "It's obviously in the best interest of the United Arab Emirates, Kuwait and Algeria to share in the increased production, rather than Saudi increasing by themselves," A.G. Edwards oil analyst Ed Maran said.
Analysts expect oil prices to remain under pressure as long as the production increase stays in effect.
But is it too late for the drop in crude oil prices to have an impact on gasoline prices?
A.G. Edwards' Maran said every $2 dip in the price translates to roughly a 5 cent decline in gas prices. However, the effect will take two to three weeks.
"If the price of oil declines to $25 a barrel, we could see about a 15 cent drop in gasoline prices," he said.
U.S. welcomes extra output
The Saudi move has pleased the United States, the world's largest oil consumer, which has been pressing OPEC all year to lower energy costs as the United States nears its presidential election.
The cartel has been under pressure to help ease high U.S. retail gasoline prices and curb concerns that rising energy import costs could stoke inflation enough to force central banks to push up interest rates.
A hard-earned consensus on supply management in OPEC, which rescued oil prices from a heavy slump in 1998, is now in jeopardy.
The Saudi plan came just 10 days after OPEC agreed to raise oil production by 708,000 barrels a day, or roughly 3 percent, to 25.4 million barrels a day, about a third of the world market of 76 million barrels a day.
That failed to push prices down to the $25-a-barrel level that satisfies both producers and major petroleum importers. Saudi had asked OPEC to lift production by a million barrels a day, but divisions within the Saudi camp and opposition from those in the cartel already producing at full capacity led to a compromise.
In March, OPEC raised production by 1.7 million barrels daily, to reverse one of three cartel supply cuts engineered in 1998 and 1999. 
-- from staff and wire reports
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