PEMEX OFFICIAL SAYS OPEC OUTPUT CRITICAL TO PRICE
Crude oil prices could remain around 18
dlrs a barrel until the end of the year, but OPEC's decision on
output at its next meeting would be the critical factor, an
official of Mexico's state oil company, Petroleos Mexicanos
(Pemex), told a group of Japanese businessmen.
    Adrian Lajous, Pemex' executive vice president of
international trade, said current OPEC output already appeared
to be very near the 16.6 mln barrel per day level it set itself
for the third quarter. "Production is surging ahead of what was
originally planned, while demand is growing more slowly than
envisaged a few months ago," he said.
    He said OPEC had to look very carefully at what level of
production in the third quarter would effectively sustain the
18 dlrs price, and that an increase to what had originally been
envisaged might soften price levels.
    The 13-member cartel is scheduled to meet on June 25 in
Vienna to review its December accord on prices and output.
    "I hope OPEC will follow a very conservative attitude in
terms of volume decisions," Lajous said.
    A repetition of what happened last year, when OPEC boosted
output and sent oil prices tumbling down below 10 dlrs, is
always there as a possibility, he said.
    "I hope never again to go through the trauma of 1986. I
expect other oil exporters have learned their lessons and
discipline will be maintained," he said.
    Lajous said there was still excess supply and as long as
this remains there will be a tendency to instability in oil
markets, but prices should remain around 18 to 19 dlrs during
1987 if output remains under control.
    He said Saudi King Fahd's remarks last month, that
increased production was not so important as long as incomes
would not be affected by the output, were "very relevant and
welcome from such a powerful producer."
 REUTER
