Kuwait, Iran, Oman, Algeria and the United Arab Emirates announced today that they would follow the lead of three major oil producers and cut output to shore up world prices.
Prices for future oil sales rose sharply today in reaction.
Libya reportedly agreed to cut production as well, but Iraq said it would go ahead with plans to boost production.
Larry Goldstein, president of Petroleum Industry Research Associates, a New York consulting firm, said U.S. drivers will probably have to pay about 5 cents more per gallon within the next few weeks.
The average price of gasoline in the United States, including all grades and taxes, was about $1.07 Friday, according to the Lundberg Survey of 10,000 stations nationwide. That was down almost 2 cents from the March 6 survey, analysts said.
The cuts announced today were in response to a decision by the oil ministers of Saudi Arabia, Venezuela and Mexico, who said Sunday that they were launching a campaign to reduce world oil output by up to 2 million barrels a day.
German company buys Random House
NEW YORK (AP) -- German media conglomerate Bertelsmann AG said today it will buy Random House, the largest U.S. book publisher, in a deal that brings some of the world's most famous authors under one roof.
Bertelsmann owns Bantam Doubleday Dell, publisher of John Grisham, and has been looking to expand its English-language consumer publishing business. The combined publishing business will retain the Random House name.
A purchase price was not disclosed.
Random House, owned by Advance Publications Inc., has published best-selling authors Michael Crichton, Norman Mailer and John Updike.
U.S. plans suit to block merger
WASHINGTON (AP) -- The Justice Department decided today to bring a lawsuit to block Lockheed Martin Corp.'s $8.3 billion acquisition of Northrop Grumman Corp., Justice Department officials said.
The lawsuit was to be filed in U.S. District Court here after a last-minute restructuring offer by the companies over the weekend failed to meet the government's objections, officials said.
The government has been seeking divestitures of key defense businesses, including the production of radar systems and electronic countermeasures, which enable pilots to evade incoming missiles. Northrup's military electronics have been a major attraction in the deal for Lockheed Martin in its struggle with the Nos. 1 and 3 military contractors, Boeing Corp. and Raytheon Co.
Welland Canal will open Tuesday
Ontario's Welland Canal will hold opening ceremonies Tuesday, tying its previous early opening records, thanks to a mild winter that limited ice on the Great Lakes.
The opening marks the beginning of the shipping season on the 27-mile channel, which connects Lake Erie with Lake Ontario and the rest of the St. Lawrence Seaway.
"We pretty well have to close every winter, if only for maintenance work," said Harley Smith, spokesman for the St. Lawrence Seaway Authority.
The Welland Canal opened this early twice before in its 170-year history, in 1995 and 1980. The usual target date is April 1.
UAW OKs Caterpillar contract
PEORIA, Ill. (AP) -- The United Auto Workers union approved a six-year contract with Caterpillar Inc. on Sunday, its first deal with the heavy equipment maker since 1991.
The contract covers roughly 13,000 Caterpillar workers, most of them at plants in Aurora, Decatur and East Peoria in Illinois and Pontiac, Mich.
The contract lowers wages for new workers and gives the company greater power to limit overtime and use temporary workers.Current Caterpillar workers get raises and increased pension benefits.
This week in business
Here are the major business and economic events scheduled for this week:
Wednesday -- The National Association of Realtors will report existing home sales for February, and the Commerce Department will release its report on durable goods for February.
Thursday -- The Commerce Department will release reports on fourth-quarter revised gross domestic product and corporate products, and the Labor Department will report jobless claims.
Friday -- The Commerce Department will release figures on personal income for February.