OPEC session is not expected to jog static oil prices locally.

OPEC session is not expected to jog static crude oil prices locally

Although local gasoline prices have been spurting upward 2 cents a gallon a week, prices posted for crude oil produced in Los Angeles County have been unchanged since they were hiked $1 a barrel in mid-April.

"It's been one of the most incredibly quiet periods I can remember," Albert J. Anton Jr. said of the crude markets. And he expects it to continue that way into the future, "until something goes wrong," added Anton, perhaps the nation's premier oil analyst at New York-based Carl H. Pforzheimer & Co., despite OPEC's June 4 meeting in Vienna.

If crude oil procuders here hope their prices will get a boost from the 13-member Organization of Petroleum Exporting Countries' oil ministers meeting, fingers likely will be crossed in vain, he indicated. "The Saudis are running around acting like they owned OPEC." They believe they've convinced Iran to join their "volume hawkish" side in OPEC, Anton said.

Saudi Arabia, OPEC's largest producer, is a volume hawk, he said, meaning the Saudis prefer to keep production high and hold down prices. Iran had been one of OPEC's leading "price hawks," Anton said, meaning Iran preferred to curb OPEC production by imposing stringent quotas in order to hike crude prices.

But Iran, currently producing about 3.5 million barrels of crude daily, plans to increase output to 5 million barrels in 1995, he said. Thus, Iran is unlikely to complain tomorrow that there now is a little overproduction of 200,000 to 700,000 barrels a day with worldwide demand for oil flattened out to maybe down 1 percent, Anton indicated.

As a result, he continued, Iran also is unlikely to push for stiffer quota compliance by OPEC members although the price for a basket of eight crudes currently averages about $17 a barrel -- $4 below OPEC's official price.

To keep Venezuela in line, Anton said, OPEC's volume hawks managed to get that nation's oil minister elected president of the oil cartel. The "Vens" in the past have been "very loyal" but recently have signaled a desire to become more independent, he said; however, past OPEC presidents usually have felt obligated not to be independent. Ah, politics! Anton sighed.

Meanwhile, he said, Kuwait is working to start producing 200,000 barrels of crude daily in the third quarter. Iraq could start producing and shipping 800,000 barrels daily from the Kirkuk field in the northern part of the nation if it gets political problems settled with the United Nations and United States, Anton said.

Crude shipments from Iraq and Kuwait were halted by UN sanctions after Iraq's Aug. 2 invasion of Kuwait. Production facilities later were destroyed in both countries during the Persian Gulf War when U.S.-led forces drove Iraq's army out of Kuwait.

Crude production and shipments from Iraq and Kuwait should be on the upswing by next spring, Anton said. Given what he foresees about supply and demand, Anton projected "no major trend for crude prices in real terms over the next five years -- under normal circumstances."

That naturally is not happy news for thousands of Angelenos who have equity stakes in oil wells, although L.A. motorists and truckers may be reassured if that scenario translates to stable gasoline and diesel prices.

Wholesale prices for gasoline have been rising about 2 cents a gallon a week for the last six to eight weeks, reported Jim Wampner, manager of volume planning at L.A.-based Atlantic Richfield Co. Independent dealers have been hiking their retail prices to motorists comparably.

Example: A high-volume, self-serve station on North Vermont Avenue by the northbound Hollywood Freeway onramp last week was retailing unleaded gasoline from L.A.-based Unocal Corp. for $1.039 a gallon. That was 20 cents more than during mid-March.

"We're trying to recover increased crude prices," Wampner said. Helping to make that possible, he said, was the reduction in West Coast gasoline output when refineries shut down partially for "turnaround" maintenance earlier this year, and gasoline inventories tightened.

Indeed, West Coast gasoline stocks were drained down to 29.82 million barrels on May 24, according to American Petroleum Institute's latest figures disclosed last week, from 30.15 million barrels the prior week. Before gasoline prices started mounting, though, West Coast gasoline stocks had built up to a relatively lofty 32.54 million barrels, according to API data.

Wampner said stocks of 30 million barrels represent a "comfortable inventory." Given that reading and that the traditional heavy driving season was kicked off during the Memorial Day weekend, he projected gasoline prices here will rise perhaps "a little more or a little less than" another nickel a gallon.

Arguing against an increase of much more than that is the fact that West Coast refineries have been stepping up their gasoline production as their operations have been expanding closer to capacity, according to API figures.

Gasoline output increased to 1.29 million barrels daily in the week ended May 24 from 1.25 million the prior week and 1.08 million in the like 1990 week. Refinery operations as a percent of capacity improved to 90.2 percent from 89.6 percent and 83.6 percent, respectively.

Posted prices for crude produced in L.A. County were in a general decline after 1990's highs of last October until mid-March when prices rose $1 a barrel and another $1 in mid-April. But no change has occurred here since then as illustrated by examples of Unocal's posted prices at two local fields:

* The price for 17-degree-gravity crude from the Wilmington field hit a 1990 high of $29.35 a barrel Oct. 3, when Persian Gulf concerns burned brightly, but skidded to $11.60 by Feb. 25 after Iraq's collapse. Thereafter, the price was raised to $12.60 a barrel March 13 and to $13.60 April 12, compared with $12.35 a year earlier.

* The price for 29-gravity crude from the Long Beach/Signal Hill field hit a high of $33.45 a barrel Oct. 3, then slipped to $14.50 by Feb. 25. Thereafter, the price was hiked to $15.50 a barrel March 13 and $16.50 April 12, compared with $14.15 a year earlier.