'Oh Where, Oh Where Will Oil Prices Go?' Oil Industry Asks

WHEN oilmen gather in Houston on Sunday for the annual meeting of the American Petroleum Institute, they will find a city that has recovered and diversified since the oil-price plunge of almost 10 years ago. The bank collapses and condo foreclosures are merely an unpleasant memory.

The oil executives themselves are survivors. Their industry carved a profit margin out of its own hide through layoffs and cost cuts. Now oil companies are thriving, even though today's $16 price of a barrel of oil is lower in real terms than before the 1973 oil embargo.

As for the 12-member Organization of Petroleum Exporting Countries, ''there's no light at the end of the tunnel,'' says an economist for a Mideast oil producer. With subsidy-distorted economies to support, OPEC members brought on the January 1986 price crash by flooding the market in desperate competition.

When the OPEC oil ministers meet in Vienna on Nov. 21, the agenda will list a familiar topic: quota cheating by some members, including Venezuela. Considering that other members want to cut OPEC's official volume, the trick in Vienna will be to ''get in and out without disaster,'' says the Mideast economist, who requested anonymity.

Economists differ on long-term supply and demand trends. These stargazers derive their forecasts from a galaxy of uncertainties, ranging from technology to Russian politics to the endurance of the Iraqi oil embargo. Some economists expect the real price of oil to slide; others say that it will soar.

''I'm in the camp that doesn't know,'' admits Ted Eck, chief economist at Amoco Corp. in Chicago.

The global demand question revolves around southeast Asia, where economies have grown at a sizzling 10 percent a year for a decade. Demand for oil has grown apace. Economists at the World Bank predict that continued rapid growth, fueled by agreements that are unfettering trade, will continue through 2010.

When Sean O'Dell, chief economist at the International Energy Agency in Paris, plugged the numbers into the IEA's detailed global energy model, he found that global oil consumption would rise from today's 70 million barrels per day to an intimidating 102 million b.p.d. by 2010. ''Something is going to have to give,'' Mr. O'Dell says. Either:

* Demand rises to 92 million b.p.d. and is met by new supplies and conservation without any real increase in price.

* Or demand reaches 95 million b.p.d., and prices climb to $28 in 1993 dollars from the current $16.

Since non-OPEC sources will supply just 1 million b.p.d. of the new demand, OPEC will have to supply the rest - if it is willing. ''It really gets down to what you think OPEC's motives and objectives will be,'' O'Dell says.

The Mideast economist says OPEC would happily settle for oil prices in the low $20s, but not $30 again, because driving prices that high caused the problems they now face. ''It's like this thing they used to say in Texas: 'Give us one more oil boom and this time we won't blow it.'''

But the boom isn't coming, in his view. Continued spectacular growth in demand ''looks good on the drawing board. But do you really expect it to take place?'' he asks. The economist also knocks the myth - 25 years old but still gospel to some - that non-OPEC sources will enter a decline, boosting reliance on OPEC.

''The trouble is, non-OPEC oil never goes down,'' the Mideast economist says. This week, for instance, Amoco announced that reserves in a Norwegian North Sea field are likely four times greater than first estimated.

And companies eagerly hunt for new oil. A giant field is about to begin production in Colombia for a total investment of $8 a barrel. ''They're going to [sell at] $16 a barrel. Do you think Ford Motors gets 100 percent return on every car?'' the economist asks.

He concludes: ''There will always be a little too much crude out there. Prices will always have a downward pressure on them.''

So what should consuming countries do? ''Let the markets work,'' Amoco's Mr. Eck says. Those countries that interfere will experience shortages, he says.

His advice is echoed by Anthony Finizza, Mr. Eck's counterpart at ARCO in Los Angeles. Mr. Finizza recently returned from India and Venezuela. In India, brownouts are frequent, yet electricity is free to farmers. The government system for setting oil product prices ''is so convoluted I can't even describe it.''

In Venezuela, which keeps gasoline prices low, ''everyone drives very large boats around. They don't care,'' Finizza says.

Demand for oil soars in the Far East. But so far the global supply of oil has kept up with world demand.