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This collection, digitized in collaboration with the Michigan Daily and the Board for Student Publications, contains materials that are protected by copyright law. Access to these materials is provided for non-profit educational and research purposes. If you use an item from this collection, it is your responsibility to consider the work's copyright status and obtain any required permission.

September 18, 1979 - Image 7

Resource type:
Text
Publication:
The Michigan Daily, 1979-09-18

Disclaimer: Computer generated plain text may have errors. Read more about this.

NEW SET OF PRICE HIKES FORSEEN
Nigeria may itopOPEC

NEW YORK (AP) - Nigeria has told
oil companies it is considering raising
the price of some of its crude oil above
the $23.50-a-barrel OPEC ceiling, in-
dustry sources said yesterday - a
move experts said could trigger
another round of oil price increases.
Nigeria is the second-largest foreign
supplier of crude oil to the United
States, after Saudi Arabia, accounting
for about 15 per cent of the oil used by
U.S. refiners.
BECAUSE Nigerian oil is among the
best in the world, it is particularly
valuable in making gasoline. But it is
currently unclear what effect the
proposed price increase would have on
prices at the gas pump in the United
States.
Sources at oil, companies that do
business with Nigeria said the Nigerian
government has proposed an increase
of three to five dollars in the price of a
barrel of Nigerian oil, which is curren-
tly pegged at the Organization of
Petroleum Exporting Countries ceiling
price of $23.50.
" They- told us they are contemplating
a three to five dollar premium on the oil"
they sell to us," said one such buyer of
crude oil from the African nation. "It's
still at the negotiation stage."

. 1 l "

THE BUYER - who asked not to be
identified - said the chances of the
Nigerian proposal taking effect were
"50-50," but he added: "The market is
tight, and they probably have more
buyers lined up there to buy than
there's oil to sell, and they think they
can make it stick."
The proposed increase, which would
be effective Oct..1, would cover only
what is known as "buyback" oil - oil
produced by oil companies in Nigeria
for the government there, and then sold
back to the companies. Companies also
produce "equity" oil in Nigeria, which
is theirs to use as they wish.
Sources estimated 600,000 barrels of
the 2.2 million barrels of oil produced
daily in Nigeria is buyback oil, and
would be affected by the proposed price
hike. But one industry source hinted
that if the price went up on part of the
Nigerian produciton, the price of the
rest would soon follow.
"IF YOU'RE going to be selling some
oil, no matter what your cost is, you're
going to be selling it at market price,"
the source said. "If the price of your
Nigerian oil goes up, why not raise your
other prices as well?"
Experts agreed the key issue in the
proposed price increase was its

seeming violation of the OPEC
agreement not to raise prices above
$23.50 a barreltat least until the cartel
meets again in December.
That ceiling, set last June, consists of
an 18-dollars-a-barrel base price, a
maximum of $2 in premiums, or
surcharges, and as much as $3.50 in dif-
ferential to take into account varying
quality of oil. OPEC nations that
produce lower-quality oil are charging
prices below the ceiling, and Saudi
Arabia, OPEC's largest and most
moderate member, sells most of its oil
at 18 dollars-a-barrel.

ce ing
SOME OPEC members have tested
the limit by selling small amounts of oil
at higher prices on the spot market,
which is not affected by the ceiling. The
spot market is where oil not covered by
long-term contracts changes hands.
The Nigerian move appears to violate
the ceiling because it affects oil sold
under long-term contracts, sources
said.
"Their response is, 'We're not
changing the price, it's a premium,' .
said one oilexecutive involved in his
firm's negotiations with Nigeria. "But
that's a little transparent."

The Michigan Daily-Tuesday, September 18, 1979-Page,7
Residents clean up
L.A. fire remains

LOS ANGELES (AP) - (Many
Hollywood Hills residents, including a
television star and a musician, began
sizing up their losses yesterday as
firefighters mopped up the smoldering
remains of a spectacular brush fire that
destroyed 24 expensive homes.
Five other costly homes were
damaged by the fire which burned 300
acres and caused $3.9 million damage
from the time it began Sunday after-
noon until it was contained early
yesterday. .
THE FIRE was visible for miles in
the smog-shrouded Los Angeles basin,
but was actually the smallest of eight
fires that had burned nearly 35,000
acres in Southern California by late
yesterday.
The air over the. city was clearer

yesterday than-it had been last week,
the worst week of smog in 25 years. Of-
ficials said an atmospheric inversion,,
which had trapped the smog close to th4.s
ground had lifted.
During the weekend, cars and houses
were covered with a fine layer of ash
from the fires, blown by the winds as,
far as 25 to 30 miles.
NED CHATFIELD, a fire depar,
tment spokesman, said the Hollywoo4'
Hills fire in the_ highly inflammabI4
brush was caused by children playing
with fireworks, which are illegal in Los
Angeles. Four youths questioned in;
connection with the blaze were released:;
yesterday, but would be charged with
illegal possession of fireworks.

New clause may delay
Cellar contract settlement

(Continued from Page 1)
however, that the union would meet
tonight to discuss its reaction to the
board decision.
The disputed fee would be either two
dollars or five dollars a month per em-
ployee, depending on the full or part-
time status of the worker. Some union
representatives objected to the "prin-
ciple" of the grandparent clause,

rather than the actual money involved.
THE LOCAL union, which was
established last year, represents ap-
proximately 60 employees, about 40 of
whom have actually joined the union.
The workers went on strike last month,
but returned to their jobs after a brief
closing of the store.
The major issue in negotiations has
been the management structure of the
store, an issue both the board and the
union have agreed will be resolved by a
joint employee-management commit-
tee after a contract is ratified.

BOUFFANT Hair Fashion I
and Hair Weave Center
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FREHAIR TREATMENT WITH COUPON

Geology student
lionored
ANN ARBOR - Neil A. Wells,
tniversity of Michigan graduate
student in geology, is one of 24 graduate
students in the nation to receive a $500
grant-in-aid for the 1979-80 academic
year from the American Association of
Petroleum Geologists (AAPG), accpr-
ding to University Information Ser-
vices.
According to the AAPG Foundation,
the grants are given each year to
graduate student research projects
largely related to the search for
economic sedimentary minerals or to
environmental geology.
Awards are based on "qualifications
of the student, the originality and
,imagination evident in the proposed
project, likelihood of a contribution to
the knowledge of energy and mineral
resources, and program of the specific
university."
Wells received the grant for his work
on "Nearshore Marine and Continental
Facies in the Eocene of Northern
Pakistan."

ENERGY.
We can't afford to waste it.

INTERESTED IN:
" Newspapers Magazines " Radio * Tele-
vision " Communications Teaching " Public
Relations * Publicity * Photojournalism

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