OPEC expected to maintain output levels

LONDON -- Consumers could pay more to heat their homes and drive their cars this winter, with worldwide demand for petroleum products rising and OPEC members showing little sign of budging beyond their reduced levels of oil production.

Ministers of the Organization of Petroleum Exporting Countries are expected to stick by their most recent round of production cuts when they meet today in Vienna, Austria. OPEC produces more than 26 million barrels of crude each day, almost two-fifths of the world's total.

At its last meeting in March, the group agreed together with key non-OPEC producers to slash daily production by 2.1 million barrels, or 2.6 percent of the global supply, in an effort to buoy prices from 12-year lows. The agreement extends through March 2000.

OPEC has displayed uncommon unity since its last meeting. Unlike the past, when members of the cartel routinely produced beyond their assigned quotas, OPEC's compliance with this year's production cuts has been high, peaking at 92 percent in August, according to the International Energy Agency in Paris.

That has helped boost prices significantly. Contracts for U.S. benchmark West Texas Intermediate crude oil are trading in New York at nearly $25 per barrel, more than double the year's low price of $11.26 set on Feb. 17.

Average pump prices for a gallon of gasoline in the United States stood at nearly $1.32 a gallon this month, up from less than $1 in February, according to the Lundberg survey of 10,000 stations.

Heating oil prices in the United States are expected to average about $1.04 per gallon this winter, up from 80 cents per gallon last year, the U.S. government estimated earlier this month.

These higher prices could tempt some in OPEC to pump more oil than their quotas allow.

In recent weeks, however, ministers from several of the 11 member countries have expressed support for continued restraint, and none has objected to the idea.

As a result, industry analysts expect that this week's meeting will not lead to any immediate changes in output.

"It would be wrong for them to change their production quota simply because of this sharp rise in price. That would be a knee- jerk reaction," says Mark Redway, an analyst with the London-based brokerage Greig Middleton and Co. Ltd.

OPEC aims to keep oil prices stable at a high level, and any increase in production would risk triggering a new round of volatility.

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