VIENNA, Austria (AP) -- OPEC oil ministers failed to reach agreement Monday on how much crude oil to add to global supplies, with Iran seen as the chief obstacle to a consensus that could provide some price relief to consumers.
The ministers were to resume discussions Tuesday on the supply issue that could have major ramifications for Alaska, which depends on oil taxes and royalties for most government revenues.
Iran accepts the need for OPEC to boost output, the Iranian Oil Minister Bijan Namdar Zangeneh said, but the amount of an increase favored by his country might not be enough to reduce petroleum prices from nine-year highs.
Zangeneh spoke before the opening Monday of the semiannual meeting of oil ministers from all 11 members of the Organization of the Petroleum Exporting Countries.
''I won't talk on numbers, but we don't want a market shortage,'' he said.
Iran, OPEC's second-largest producer, is known to favor boosting output by about 1.2 million barrels a day -- an amount that probably would do little to reduce world oil prices.
An OPEC delegate, speaking on condition of anonymity, told reporters that Libya, Indonesia and Nigeria back Iran's position.
Two other key producers in the group, Saudi Arabia and Kuwait, have proposed a production increase of 1.5 million to 1.7 million barrels a day. The upper limit of their proposed increase would amount to about 7 percent more than what OPEC members agreed to pump after curtailing output last March.
For U.S. motorists and other consumers of refined products such as gasoline, much hinges on efforts by Saudi Arabia, OPEC's No. 1 producer, to win Iran over to its point of view.
American motorists now pay an average of $1.59 per gallon for unleaded gasoline, an increase of nearly 60 cents since prices bottomed out at 99.8 cents per gallon in February 1999, according to a Lundberg Survey of 10,000 U.S. gas stations released Saturday.
Industry analysts warn of possible shortages and $2-a-gallon gas during the peak driving season this summer if OPEC fails to increase production significantly. The higher prices would boost Alaska's economic and budget fortunes, however.
Meanwhile, Federal Reserve Chairman Alan Greenspan sought Monday to minimize fears raised by some U.S. lawmakers that a recent spike in fuel prices could have a negative effect on the economy.
''Currently, we do not as yet -- and emphasize as yet -- see any significant indication that crude oil price increases are in the process of embedding themselves in other areas of the economy and inflating the general price structure,'' he said in testimony before a Senate committee in Washington.
Greenspan said it was unclear what level of energy inflation would be needed to spread to other areas of the economy.
OPEC, which operates on consensus decisions, must decide whether to extend cuts it made in 1998 and 1999 that have propelled oil prices to their highest levels since the 1991 Persian Gulf War. The latest round of cuts expires at the end of the week.
U.S. oil prices tripled to a March 8 peak of $34.37 per barrel following OPEC's decision last March to slash production.
Prices for U.S. West Texas intermediate crude in the United States, world's biggest consumer of oil, and Brent crude from the North Sea have eased somewhat in recent weeks amid optimism that OPEC will raise output.
Crude oil for delivery in May fell 23 cents to $27.79 a barrel Monday on the New York Mercantile Exchange. In London, May Brent also fell 23 cents to $25.68 on the International Petroleum Exchange. Alaska North Slope crude dropped to $25.97 a barrel, down a quarter from Friday's close.
The United States, world's biggest consumer of oil, has lobbied the cartel to raise production. The government has said that an increase of 2 million to 2.5 million barrels per day is needed to replenish inventories and satisfy growing world demand.
OPEC pumps more than 26 million barrels of crude each day, or about 35 percent of the world's supply. Key non-OPEC producers, such as Mexico and Norway which cut back their production in tandem with OPEC, have said they are watching to see what OPEC will do before adjusting their own output.
The Saudis want to stabilize prices at a level that won't cause extreme economic pain for the nations that buy its oil. If high prices start damaging economies, producers fear that demand for oil -- and OPEC's export earnings -- could plummet.
OPEC members currently are producing about 1.2 million barrels a day over the cartel's quota. The quota increase sought by Iran would just about ''legitimize'' that amount but would fall short of adding more crude to the work's inventories.
Libya added to the uncertainty about the outcome of the semiannual meeting.
Abdalla Salem El-Badri, head of Libya's National Oil Corp. told reporters that he was still concerned that global demand for oil might decline in the second quarter of the year, when demand for oil and refined products historically dips to its annual ebb. He suggested Libya would like to see production raised later this year.
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