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OPEC Tentatively Agrees to Raise Oil Production Quotas

Aired June 21, 2000 - 1:01 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: First it was a nuisance, then a burden, now the high price of midwestern gasoline is well on the road to becoming a national scandal.

Here's why: a gallon of unleaded regular gas that cost a $1.76 last month in Chicago now sells, on average, for $2.13; in Milwaukee, it's up from $1.69 to $2.03; in Green Bay, $1.51 to $1.86; in Detroit, $1.48 to an even $2.

Nobody's quite sure why, but everyone agrees oil prices have soared, and various state and local taxes can add as much as 60 cents to a gallon of gas, depending on the location. On that front, the governor of Indiana has suspended his state's sales tax on gas for up to 60 days. That will save, he says, hoosier motorists between seven and 10 cents a gallon.

On the supply side, the price of crude will go down if production goes up, and that's question being decided, as we speak, by the Organization of Petroleum Exporting Countries, OPEC, now meeting in Vienna.

CNN's Tom Mintier is keeping watch in Vienna.

Tom, what do we know?

TOM MINTIER, CNN CORRESPONDENT: Lou, for the last several hours today, they've been trying to hammer out some type of agreement. They do say they have an agreement on raising production quotas. Just by how much, though, hasn't been announced, that will probably come within the next hour. They have just closed the doors on the meeting.

You were talking about taxes a little earlier. The Venezuelan oil minister criticized heavily those in the West who are complaining about high gas prices, saying that the governments need to get off the consumers' backs to remove some of these taxes to bring relief at the gas pump. He did not say that the amount that was going to be increased, to try to alleviate some of the pressure on the crude price, but said that governments need to reduce and remove some of these taxes that have been in place to raise revenue for governments; take it off of the pump price to allow consumers to have a break.

Now just how much OPEC is going to increase the production, to set those wheels in motion, is still not exactly clear. While the chairman of OPEC says that there is an agreement, he will not and did not say by how much. The speculation has been running here all day, anywhere between 500,000 and 900,000 barrels a day of an increase in output.

Just how much that would affect the markets is really not clear. With the word out that it was going to be half a million, actually crude oil prices throughout the day, in both British and U.S. markets, actually increased.

So if -- unless there is something in the neighborhood of between 700,000 and 900,000 barrels per day put forward here by OPEC, the markets probably aren't going to react in the opposite direction.

And when and if it happens, it will not come to the consumers or to the pump at least for several months; then you're past the driving season, you're into the heating season and you're talking about a whole different bunch of parameters. So we'll have to wait and see in another hour or so just how many barrels it is -- Lou.

WATERS: All right, Tom Mintier, keeping watch at the OPEC meeting in Vienna, waiting for the answer to the question: how much?

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