Officials worry

the market will

be flooded in

2004, and prices will be too low.

VIENNA, Austria (AP) – OPEC expects oil prices to stay stable through the rest of the year, but is concerned that a glut on the market could push prices too low next year, Secretary-General Alvaro Silva said Thursday.

The Organization of Petroleum Exporting Countries will work to maintain prices to avoid risking a drop in supply because of too-low prices, Silva told a news conference at the group’s headquarters.

“The concern is more that there will be a drop in prices than that there will be high prices,” he said. “The concern is that there will be a lot of oil in the coming year in the market, and we don’t want too low prices as in 1998.”

Back then, OPEC prices fell below $11 a barrel. OPEC has since introduced a policy of adjusting the output if the price stays above or below a price band of $22 to $28 per barrel for an extended period of time. The reference basket price has recently hovered just above the upper limit, but it returned to within-band price Wednesday and Thursday.

Silva told reporters Thursday he expected non-OPEC countries to cooperate to keep the market balanced, adding he couldn’t “imagine” a situation where OPEC members would have to make further cuts unilaterally without any support from oil producers outside the organization.

He said he planned to discuss cooperation with Russian oil officials during a Nov. 3-6 visit to Moscow to attend an oil conference. Other OPEC officials plan talks with Mexican authorities, he added.

An output reduction of 900,000 barrels per day off the current 25.4 million barrels a day would be implemented Saturday as planned, he said, adding it could be reconsidered when the group meets next Dec. 4.

“We need to wait for a period (before the effects of the cut can be evaluated),” he said.

There are no plans for OPEC to meet prior to the scheduled meeting, Silva said, adding that the meeting’s agenda does not include discussions to increase the price band to $25 to $32, as recently suggested by Venezuelan President Hugo Chavez.

Despite the concerns about a 2004 glut, Silva appeared confident that OPEC would manage to keep the oil trade stable.

“We are not in front of a catastrophe. The oil supply is good. The prices are working well,” he said.

AP-ES-10-30-03 1620EST