'World oil surplus likely'

Press, Volume CXIV, Issue 33541, 23 May 1974, Page 13

' World oil surplus likely '

(N.Z. Press Assn— Copyright)

NEW YORK, May 22. The world is rapidly movng into a surplus situation in oil, according to the head of an industrial research group.

Mr John Lichtblau, an executive director of the Petroleum Industry Research Foundation, said yesterday that the surplus is developing because high oil prices have reduced world demand. "I would say that il present price levels remain force, the surplus could

be with us for some time, even if Saudi Arabia, Kuwait and Libya maintain existing production limits,” Mr Lichtblau told the New York Society of Security Analysts. He said that in the first nine months of last year there was no world shortage of oil and that oil inventories began accumulating in Europe because of increased oil production. The Arab oil embargo,! which coincided with the Organisation of Petroleum I Exporting Countries price i increases, had partially cam-1 ouflaged the surplus tend-; ency. i

For the last nine months of 1974, world oil demand was unlikely to be significantly higher than it would have been in the same period of 1973 in the absence of the Arab oil embargo, he said. “If we assumed that exist-j ing prices will be maintained; and that no maior exporting, (Country will, for economic! [or political reasons, sign-; ificantly reduce its output i [below ' the present level,! | more oil is likely to be[ [offered for sale in the next! [several years than will be! lactually consumed.”