Oil cutbacks move closer

THE PROSPECT of agreement over production cuts among Opec members drew slightly closer over the weekend after major oil producers Saudi Arabia and Venezuela agreed to meet non-Opec Mexico in Madrid this week, to discuss curbs amid the deepening petroleum market crisis.

Last week, Gulf Arab oil states agreed to extend output cuts until the end of 1999 and urged others to do the same.

One Opec delegate said: "The indications are that the new Venezuelan administration will work with other Opec states to raise prices higher and they will be less concerned with market share." Venezuela's position matters because Mexico and Saudi Arabia, its rivals for the vast United States market, are unlikely to make deeper supply cuts unless Caracas matches them.

Two earlier rounds of curbs masterminded by the three producers this year have failed to boost prices, which, at just under $10 a barrel, are at their lowest since 1976.