World oil prices are drifting gently but steadily downward, despite OPEC's efforts to stop the decline. Good news? Well, it depends on who you are and where you sit:
*For North American consumers, the signs are upbeat. Lower energy prices mean a further boost for industry, relatively low gasoline and home-heating costs, and an even stronger dollar abroad. Some of the costs of exporting fall. Costs of importing also drop.
[In Geneva Thursday, the Organization of Petroleum Exporting Countries announced agreement to keep its production ceiling of 16 million barrels a day. The 13 members have yet to find ways of enforcing individual production quotas. OPEC oil ministers decided to recess their year-end summit for one week to seek the advice of their heads of state, UPI reported.]
*For Northern Europe, signs are more mixed. Yes, lower energy prices are beneficial - but oil is sold in dollars, and Europeans have to pay for it in their own local currencies.
In Britain, traders see weaknesses in the economy, in large part because British oil exports will earn less if prices keep falling. Ironically, lower oil prices mean higher and higher gasoline prices in Britain as oil companies try to recoup higher and higher pound sterling outlays for oil.
Even stronger economies such as those of West Germany and France find that the benefits of falling oil prices are offset by the strength of the dollar.
Stock brokers at Wood McKenzie in Edinburgh compile an index of oil and local currency fluctuations that shows that oil for European buyers is actually twice as expensive now as in January 1980, measured in sterling, francs, marks, lira, etc.
*For the third world, implications are also mixed.
Countries like Kenya that import large amounts of oil stand to benefit by having more money to spend on other items such as imports and debt repayments. But a Nigeria, with a huge population and a government that depends on oil for 90 percent or more of its revenues, is hit hard if oil prices sink. Third-world oil consumers benefit - while producers worry.
*For OPEC itself, falling prices are another signal of waning influence as a cartel, many officials and analysts say.
''OPEC simply has less control over its own oil output than ever before,'' comments David Johnson, an energy analyst with Wood McKenzie, in an interview. ''Over the last 19 months, OPEC has been seen as less and less able to hold down production by its own members or by non-OPEC countries.''
The authoritative New York-based Petroleum Intelligence Weekly now sets actual OPEC production at 16.7 million b.p.d.
OPEC is a victim of the world glut of oil, of unseasonably warm winter weather so far in North America and Northern Europe, and of a general market feeling that prices will fall even lower. That expectation leads oil companies to delay major purchases while drawing on stocks instead for current needs.
OPEC's answer in Geneva was to reduce the prices of high-grade light oils (Algerian, Libyan, Saudi, Nigerian) while raising the prices of heavier oil (Saudi and others).
''Ineffective,'' a London oil analyst commented. ''All OPEC can do is maneuver - and ask non-OPEC producers to hold back.''
(The delegates said OPEC leaders such as Saudi Oil Minister Ahmed Zaki Yamani were apparently determined that the conference should emerge with an agreement that would restore OPEC credibility, Reuters reported.)
The emerging oil heavyweights are the major non-OPEC producers: Britain, Norway, Mexico, and the Soviet Union.
According to Petroleum Intelligence Weekly, free-world oil (and natural gas liquid) production in 1979 was 48.5 million b.p.d., of which OPEC produced 30.8 million.
By October of this year, the free-world figure had fallen to 42.3 million b.p.d., and OPEC was producing only 16.7 million.