MOST JAPAN FIRMS NOT RENEWING IRAN TERM CONTRACTS
  Most Japanese companies have decided not
  to renew term contracts to lift Iranian crude oil because spot
  prices remain considerably lower than OPEC's official levels,
  industry sources said.
      They said a cargo of the Mideast benchmark crude Dubai
  traded yesterday at 16.50 dlrs a barrel, compared to its
  official price of 17.42 dlrs.
      Only one Japanese company has renewed its term contract for
  Iranian crude oil for the second quarter, the sources said.
      The sources said Japanese companies had been lifting a
  total of about 185,000 barrels per day (bpd) of Iranian crude
  under term contracts, but only one firm has agreed to lift in
  the second quarter. It is lifting just 10,000 to 15,000 bpd.
      They said this move could inspire Iran to offer discounts
  on cargoes loading in April, but the likelihood of discounts
  depended largely on the levels of spot prices.
      "If the spot price of Dubai goes above 17.30 dlrs we would
  probably buy Iranian crude at the official price," one Japanese
  refiner said.
      "We don't intend to put pressure on them," he added.
      Buyers have little incentive to renew contracts to lift oil
  at official OPEC prices while spot prices on all grades are
  considerably lower, oil traders said.
      They said if spot prices move higher there will be no
  problem finding OPEC crude to purchase at the official prices.
  Qatar has chartered floating storage for its crude oil after
  finding no buyers at official prices in March. The problem is
  likely to recur in April, adding to that country's surplus.
      The traders added that Iraq had dissociated itself from
  OPEC's December production agreement, while agreeing to the
  fixed prices.
      But oil analysts said if OPEC keeps group output close to
  its first-half 1987 ceiling of 15.8 mln bpd, supply and demand
  would be balanced by the end of the second quarter.
      They also said if OPEC holds its official price structure
  based on a reference price of 18 dlrs, spot price fluctuations
  should be limited to a 16.50 to 17.20 dlrs range for Dubai and
  a 17 to 18 dlrs range for the North Sea's Brent blend.
      One Japanese refiner said, "At the moment there's a lot of
  pressure on OPEC, particularly on Qatar. But if they hold out
  there will be no problem, and I'm beginning to trust their
  ability."
      Nigerian oil minister and OPEC president Rilwanu Lukman
  told a news conference in Lagos yesterday, "Nigeria and all
  member countries of OPEC remain determined to uphold the
  December agreement by adhering strictly to their various quotas
  and official selling prices."
      He said OPEC believed consumers had drawn heavily on stocks
  of both crude oil and refined products, reducing them to levels
  well below this time last year. He said consumers would soon
  return to the market in search of crude.
      A Japanese refiner said, "The European and U.S. Markets are
  beginning to look better so OPEC might be quite lucky."