The OPEC ax has fallen. But analysts, economists, and traders contacted by this newspaper were uniformly unimpressed by the OPEC decision Monday to cut its price by $5 (to $29 dollars a barrel) and to try to establish a quota of 17.5 million barrrels per day after seven days of continuous meetings in London.
It will take a week to assess the full impact of OPEC's new price and production plan. But analysts expect a gradual fall in oil prices as world demand stays weak for the next six months.
Another round of price-cutting could come within three to four weeks.
Each $1-a-barrel drop in world oil prices theoretically means a savings of 2. 3 cents a gallon for American motorists and homeowners who heat with oil. But much of oil on the market now already reflects OPEC's new benchmark price of $29 a barrel.
''OPEC no longer has the power to put a solid floor under oil prices,'' as one City of London analyst put it.
''They waited too long and argued too much. Non-OPEC production is too big. World demand is still very low.''
After the OPEC announcement, which included a $1 premium for Nigerian oil ($ 30 a barrel) and $1.50 premiums for Algerian and Libyan oil ($31.50), the analyst added:
''It was about as I expected. I don't think OPEC can hold the line, and I don't think the market will think so either.''
OPEC itself sees a very different scenario. Saudi Oil Minister Sheikh Ahmed Zaki Yamani sees spot prices, now below $29, firming to that level after oil companies see that ''this is a well-planned package deal.''
But Sheikh Yamani did not rule out a price war ''if the non-OPEC countries want it.''
Iran failed to agree to the decision to cut the OPEC price to $29, but ''reserved its position'' instead.
Tensions between Iran and Saudi Arabia surfaced after the announcement when Sheikh Yamani revealed Iran's quota - 2.4 million barrels per day (b.p.d.) - even though such quotas were not supposed to be made public.
A key part of the new deal is that Saudi Arabia will take no fixed quota but will act as a ''swing'' state, decreasing (or increasing) its current low production (3.5 million b.p.d) as required to keep within the 17.5 million b.p.d. ceiling.
Many traders and analysts here are unconvinced that Saudi Arabia can go much below 3.5 million b.p.d., and they see all kinds of trouble ahead for OPEC as world demand stays low for the next six months of warmer weather.
They still believe that Britain, the price-setter for non-OPEC oil, will cut its North Sea prices below the Nigerian price of $30.
OPEC hopes that Britain will cut only 50 cents, from $30.50 to $30. Sheikh Yamani indicated as much in a post-announcement news conference Monday.
But it is widely expected in London that Britain will lose sales in the United States if it does not cut clearly below the Nigerian price, since Nigerian oil is of superior quality and yields higher-priced products per barrel.
If it goes below Nigeria, pressure on Lagos to start a price war will be immense, despite OPEC members' announced agreement here to engage in no undercutting or discounting.
Before the OPEC announcement, the Rotterdam spot market, in light trading, was already pegging North Sea oil at around $27.50 to $28 a barrel, and Saudi light crude (the OPEC reference price) at $27 to $28.
The North Sea's largest producer, British Petroleum (BP) is so eager for Britain to lower prices that it issued an unorthodox public statement here March 10 estimating that North Sea oil should cost 75 cents to $1 a barrel less than Nigerian crude.
British cuts would galvanize Nigeria, whose foreign exchange reserves are now so low that they can cover only about one month's imports.
Lagos has vowed to match any British reductions to keep its North American and other customers. Pressures for it to keep selling at low prices will rise as presidential and general elections approach later this year.
Saudi Arabia, which has borne the brunt of production quotas so far, cannot allow its own production to fall much below current rates without threatening supplies of associated gas, which produce electricity and desalinate seawater.
Venezuela, with external debts of almost $28.5 billion, has held out for a quota of at least 1.8 million b.p.d., 200,000 b.p.d. higher than other members wanted to permit.
Algeria and Libya urgently need oil revenues.
In the wings stands non-OPEC Mexico, with external debts of $80 billion. OPEC hopes it will adhere to the new OPEC price of $29 a barrel.
''Buyers will go for those producers in the biggest trouble, whose need to sell is greatest,'' says a Rotterdam trader.
Tony Parisi, London bureau chief of the highly regarded Petroleum Intelligence Weekly, is one expert who believes that 17.5 million b.p.d. is a ''not unreasonable figure'' for OPEC to aim at for all of 1983, but says OPEC's challenge is to make buyers believe it is realistic in the next few months.
In an interview, Mr. Parisi said OPEC production today had sunk to about 14 million b.p.d.
Winter weather had been warm in the northern hemisphere, conservation of oil had been consistently underestimated, and oil companies were using stocks instead of buying new oil as they waited to see how low prices would fall.
''There will be a bounce-back in demand,'' he said, ''toward the end of the year. Oil companies will start buying again, and any upturn in the world economy will see more oil being used.''
The key question: how big will the bounce-back be?
Sheikh Yamani said March 14 that the OPEC 17.5 million b.p.d. ceiling would be set quarterly, starting now, and states could not carry-over unfulfilled production. That was a firmer move than some here had expected, but may not be enough to reassure the spot market.