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OPEC to Increase Daily Oil Output by 3 Percent; Supply to Reach U.S. Near End of SummerAired June 21, 2000 - 2:26 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: Lawmakers on Capitol Hill will meet this afternoon with the Environmental Protection Agency administrator and executives from major oil companies to discuss the spiraling cost of gasoline and what can be done about it, if anything. This comes as the Federal Trade Commission opens an official investigation into suspected price gouging and suspected collusion among the oil companies.
Coinciding with these events, OPEC ministers meeting in Vienna now have agreed to a modest 3 percent increase in crude oil production.
CNN's Tom Mintier has been watching closely that meeting going on in Vienna and joins us now for what, Tom, some analysts already are saying is no big help from the producers for gas prices in the West.
TOM MINTIER, CNN LONDON BUREAU CHIEF: Well, I think it's probably less than some, especially in the U.S. government, would have liked to have seen come out of this meeting, but it is more than what most speculation was here in Vienna at the start of the day. There was talk of only 500,000 barrels being added to the output production by OPEC. They have gone over that by about 200,000-plus.
Also, the chairman of OPEC saying that OPEC and non-OPEC producing countries will end up increasing the output production by well over 1 million barrels a day. That's the figure he is putting out. And he also talked about a price target -- not a set price, but what the OPEC producers would like to see. They say they would like to see $25 a barrel; no lower than 20, no higher than 30. Currently it's trading anywhere from 29 to 33. So they're looking for some fluctuation in the market.
But there was also some criticism levied at Western governments, especially in Western Europe, saying that taxes often make up 70 percent of the price of a gallon of gasoline, with oil producers receiving only about 16 percent of that price per gallon. So they're saying that governments need to take the tax off of gasoline, stop using it as a revenue generator and give consumers a break, they say.
But they have increased, what some consider significant, some say not enough. And they also said they don't want a price band. They don't want to see a band set for OPEC-producing nations of, say, between 20 and 30 as a hard and firm, fast rule. They say they want to see it settle somewhere around $25 a barrel.
So, the OPEC producers say they've done a lot, but some will say they haven't done enough -- Lou.
WATERS: Tom, as I understand it, this production increase is to take effect on July 1, too late, I would imagine, to get into the pipeline to afford any safety valve for the increasing prices in the United States.
MINTIER: Well, in the United States they also blame the EPA and the reformulated gasoline that American refiners apparently can't produce fast enough to meet the demand. They say that's a problem -- not OPEC's problem, but the refinery problem and the U.S. government's problem, a calling on OPEC to possibly see the EPA lift some of these restrictions and put back the implementation time, which was June 1 for this reformulated fuel that is in short supply.
So this increase that goes into the pipeline is probably going to come out by the end of the summer and the beginning of the winter heating season, so there are going to be additional pressures on the market, especially in the United States and Europe, going from motoring to keeping your house warm.
WATERS: All right, CNN's London bureau chief Tom Mintier in Vienna today.
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