Mexico to Raise Oil Output, but Tells U.S. Not to Be Pushy
By JULIA PRESTON
March 22 -- Joining the frenetic jockeying before
an oil producers' meeting next week, Energy Minister Luis Téllez
said today that Mexico had decided on an oil production increase of less
than 325,000 barrels a day starting in April.
Picking his words
carefully, Mr. Téllez cautioned the United States not to
be too blunt in pressing the oil nations for increases in output, warning
that heavy lobbying could backfire by stirring nationalist political
opposition. "The big players of the oil market have already said there
needs to be more oil," Mr. Téllez said. "The message has gotten through.
The facts are there. I think a proper decision will be taken."
lawmakers -- their constituents paying soaring prices for
home heating oil and facing the prospect of continued steep gasoline
prices -- have sought to press the producers to pump more oil. Senior
members of Congress have called on the Clinton administration to take
antitrust action against the Organization of Petroleum Exporting
said President Clinton had "achieved a very fine balance" with
his relatively mild suggestions to speed up production.
is not a member of OPEC, Mr. Téllez said he would not
attend its oil ministers' meeting that begins on Monday in Vienna, but
would send a deputy. He has been on the phone in recent days, telling
many of his counterparts that Mexico has decided to raise output and
encouraging them to do the same.
Mexico will disclose
the final figures for its increase as soon as OPEC
makes it announcement. Starting in March 1998, when demand was
lagging and prices down, Mexico responded with cutbacks that
amounted over time to 325,000 barrels a day. The reductions were part
of an agreement with Saudi Arabia and Venezuela that expires on April
1. Mr. Téllez said the new increase would not completely erase that
cutback. Mexico, the world's fifth-largest oil producer, now pumps 2.9
million barrels a day.
With a presidential
campaign under way in this country, the government's
opponents have accused Mr. Téllez of deferring to the United States and
sacrificing Mexican interests by favoring larger supplies of oil to bring
down prices. A newspaper cartoon depicted him as receiving credentials
as "the second ambassador from the United States."
But Mr. Téllez
argued that continued high prices could slow the world
economy and eventually depress growth in Mexico. "We are most
interested in having a dynamic world economy," he said, adding: "What
we want is a stable, profitable price. For that, we need a stable supply of
poll shows that most Mexicans, despite their strong
patriotic attachment to the nationalized oil industry, agree with him. In a
nationwide survey, 75 percent approved of raising production to bring
In December 1998,
Mexico was getting less than $8 a barrel for its
crude oil. Today, after price increases powered by OPEC's cutbacks as
well as the continued economic boom in the United States and the
rebound of some Asian nations, Mexican oil is selling at $24.26.