FAR EAST TRADERS EXPECT 20 DLR OIL IN JANUARY
  OPEC's agreement to limit output to 16.6
  mln barrels per day (bpd) for the rest of the year should boost
  spot prices and enable the group to raise its official
  reference price to 20 dlrs a barrel in January from the current
  18 dlrs, Far East oil industry sources said.
      "Fundamentally, the market situation is bullish and the
  official price will be 20 dlrs in January," a Japanese refiner
  said.
      The sources said that in spite of over-production by OPEC
  members such as Iraq, the United Arab Emirates, Kuwait and
  Qatar, demand should exceed supply by the fourth quarter.
      Spot oil prices surged on Friday in late U.S. Trading as
  the market anticipated an OPEC agreement on second-half 1987
  output. In early Tokyo trade, levels were firm at 17.30 dlrs
  for Mideast Dubai cargoes loading next month and 19.00 dlrs for
  U.K. Brent, traders said.
      They said they expect more foreign crudes to be sucked into
  the U.S. Market as the benchmark crude West Texas Intermediate
  (WTI) trades at around 20.30 dlrs.
      "With WTI at 20, 21 or 22 dlrs, U.S. Refiners will import
  Mideast and Far East crudes and this will strengthen those
  grades further," said a Japanese oil trader.
      Some Tokyo traders were cautious about whether thU spot
  market has further upward potential in the short term, having
  risen strongly on the OPEC news on Friday.
      "You could certainly argue that if New York rose on that
  basis, there's no reason for prices to go up again today," said
  one international oil trader in Tokyo.
      "But I think if there's any sign of a dip, it will be bought
  back up again pretty quickly," he added.
      One oil industry analyst concurred, "There is no reason to
  expect a weak market from now on." He said he expected OPEC to
  raise prices to 20 dlrs when it meets on December 9.
      Oil sources said spot prices are unlikely to surge strongly
  in the next few months due to cheating by some OPEC members and
  the likelihood that Saudi Arabia will act as swing producer to
  maintain steady prices.
      Iraq is currently producing around two mln barrels per day
  compared to its second-half quota of 1.54 mln, they said. Its
  export capability will rise to 2.5 mln bpd when a new pipeline
  through Turkey, comes onstream in or around September.
      Qatar is said to be achieving sales of around 350,000 bpd,
  against its OPEC-assigned quota of 299,000, by discounting up
  to 20 cents a barrel from official prices, the sources said.
      Iran, the United Arab Emirates and Kuwait are also cheating
  on the OPEC agreement with over-production and effective price
  discounts through counter-purchases, industry sources said. But
  they mostly agreed that Saudi Arabia will unofficially act as
  swing producer, cutting production to compensate for higher
  output by other members or boosting output if spot prices rise
  too high too fast.
      Saudi Arabia has a floating oil stockpile of 40 to 50 mln
  barrels. "Saudi Arabia wants oil price stability so the
  stockpile may be utilized to cool down the market if it rises
  too much," an oil industry analyst said.