Oil prices are at the highest levels in 9 years. Crude oil prices are over $30 a barrel. The reason is that the Organization of Petroleum Exporting Countries (OPEC) has reduced output by 4.3 million barrels a day, and non-members Mexico and Norway have restricted their exports. It is expected that the excess demand will be 1.4 to 2 million barrels a day on average in 2000.

The U.S. is putting pressure on the oil producing nations to increase the supply of oil. However, the outcome is uncertain because the oil producers have differing views. On one extreme, Iran wants to delay increasing output. In the middle, Venezuela does not think that an increase is needed because demand typically falls in the second quarter. At the other extreme, Mexico is willing to raise output to help replenish American supplies as early as April 1.

(Updated April 1, 2000)