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Oil dips as new cuts panned
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August 3, 1998: 5:22 p.m. ET
Mexico, Venezuela nix Kuwait output cut plan; softer gold prices slump again
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NEW YORK (CNNfn) - Crude oil took another spill below the $14 a barrel mark on Monday as a rift began to appear between the world's top producing countries over whether to cut back output again.
The crude oil futures contract for September delivery dropped 51 cents to $13.70 a barrel Monday.
The slump came as a key producer over the weekend floated plans to expand an already-tenuous accord to cut output later this year -- and that idea quickly was rebuffed by two others -- threatening to disrupt a touchy alliance to curb production.
Kuwaiti Oil Minister Sheik Saud Nasser al-Sabah said Saturday members of export cartel OPEC could need to cut another one million barrels a day when they meet in November if oil prices don't revive.
But Mexican Energy Minister Luis Tellez said Saturday such talk was "premature," and Luis Guisti, head of Venezuela's state oil company, said he felt his country had made enough cuts already.
"The Mexicans and Venezuelans basically pooh-poohed discussing another round of cuts," said Michael Rothman, an analyst at Merrill Lynch. "They essentially said that they have no interest in discussing that right now."
On two separate occasions this year, OPEC member nations agreed to cut output by 1.355 million barrels a day to help boost lagging oil prices. But many analysts are circumspect about whether members will hold to the deal.
Oil prices hit 10-year lows in March.
Saudi Arabia, the world's largest producer, said earlier this summer it had indeed reduced output -- and the first deliveries of Saudi oil to U.S. shores are expected to bear that out in early August.
The production curbs, agreed to last spring, were meant to counter excess supply. But oil prices recently suffered a second blow: lower-than-expected summer demand in the United States.
Gold prices soften again
In another key commodity market, continued softness in the Japanese yen continued to beat down gold prices Monday.
The Comex gold futures contract for December delivery closed down $2.60 an ounce at $287.90 Monday, after losing $2.70 Friday.
"The market is in the grips of deflationary sentiment, the dollar has remained strong, and concern lingers about the economies in Asia," said PaineWebber analyst Bernie Savaiko.
The Japanese yen, which analysts see as a linchpin to Asia's ability to buy gold, fell to a level of 145.64 yen to the dollar. 
-- from staff and wire reports
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