Oil Prices Rally as Iran Opposes OPEC Session

Oil prices rallied for the second consecutive day Wednesday as Iran joined other OPEC nations opposed to calling an emergency meeting of the 13-nation cartel to defend its $18-a-barrel target.

On the European spot market, Britain’s North Sea Brent crude surged by 55 cents to $17.15 a barrel. West Texas Intermediate, the benchmark U.S. crude for immediate delivery on the New York Mercantile Exchange, gained 16 cents to $17.51 a barrel after trading as high as $17.75 early in the day.

In Tehran, Iranian Oil Minister Gholamreza Aghazadeh said the Organization of Petroleum Exporting Countries was producing below its 15.8-million barrel a day ceiling and he saw no need for the cartel to hold an extraordinary meeting, the Iranian news agency IRNA reported.

“There has been a lot of jawboning from Saudi Arabia, Indonesia, Nigeria and now Iran about not wanting to call an extraordinary OPEC meeting,” said Sanford Margoshes, analyst at Shearson Lehman Bros. Inc. in New York. “ ‘Extraordinary’ has become a dirty word for OPEC, which means to them they’re failing.”

Meeting Postponed

Margoshes said OPEC, which agreed Dec. 20 to cut production and raise oil prices to an official average of $18 a barrel, is not on the brink of failure even though it is facing resistance from oil companies unwilling to pay fixed prices for its crude.

The United Arab Emirates news agency WAM said OPEC has indefinitely postponed a meeting of the seven-nation pricing differentials committee that had been scheduled April 2 and given rise to speculation that it could be expanded to an emergency meeting.

Industry sources said Saudi Arabia, OPEC’s largest producer and the architect of the December accord, had urged other members to resist discussing an emergency meeting that could be interpreted as a sign the cartel was buckling under combined pressures from oil companies and declining seasonal demand.

Oil prices shot up by nearly $1 a barrel Tuesday amid reports that OPEC production had plunged by almost 1 million barrels to within its ceiling in late February and France’s two major oil companies had agreed to buy oil from Saudi Arabia at official prices.

Oil traded on the world market had tumbled by nearly $3 a barrel until Tuesday’s rebound broke a six-week slump, but analysts were reluctant to predict that a bottom had been reached.

Buying spilled over into Wednesday’s session, driving up West Texas Intermediate on the U.S. Gulf Coast spot market by 65 cents to $17.55 a barrel.

Home-heating oil for immediate delivery on the Merc inched up 0.16 cent to 46.44 cents a gallon, and unleaded gasoline rose 0.56 cent to 50.69 cents.