SAUDIS GROW IMPATIENT FOR OUTPUT CUTS

SAUDIS GROW IMPATIENT FOR OUTPUT CUTS

Saudi Arabia, the Organization of Petroleum Exporting Countries' biggest exporter, appears irritated at other cartel members that have been slow to join it in making promised cuts in oil output to erase a world surplus.

After a strongly worded statement last week by Hisham Nazer, oil minister, industry officials say the Saudis have hinted that their patience may run out if others in OPEC have not made meaningful cuts by about mid-June.Kuwait and the United Arab Emirates are two of the leading overproducers.

Spot crude oil prices on the New York Mercantile Exchange posted a sharp drop because a 2.1 million-barrel increase in U.S. crude oil inventories

underscores the scale of the world-wide glut. (See story on Page 10B.)

Persian Gulf oil sources said there was not yet any deadline for when Saudi Arabia might start to increase its own production. But they said simple commercial logic dictated that Saudi Arabia might want to re-examine its policy if the other producers' failure to help reduce the glut continued to depress prices.

The Saudis feel the arithmetic is unfair. They had expected that their own cut under an OPEC agreement on May 3 would be matched by others so that firmer prices would offset their revenue losses from reduced volume.

In the past, notably in 1986, the Saudis have increased production, flooding the market. This has caused prices to plunge and other OPEC members to experience sharp drops in revenue.

According to Western industry sources, after the May 3 meeting the Saudis quickly dropped production by 400,000 b/d to a mandated quota of 5.4 million barrels a day.

Evidence could not be found of any similarly rapid drop from Kuwait or the United Arab Emirates, although Western analysts say there are signs that Kuwait has begun to act and that a decline of 200,000 b/d will be apparent soon.

The gulf sources said that, with the OPEC accord now a month old, the Saudis would be anxious to see discipline by others, such as Nigeria and Venezuela.