Oil market stable but edgy, says Shell man

Press, 19 April 1980, Page 9

Oil market stable but edgy, says Shell man

■ NZPA-Reuter London 1 Oil supply and demand should be reasonably balanced in 1980 but the Iran crisis could trigger a new I price explosion, the head of (the Royal Dutch-Shell Oil (group (Mr Dirk de Bruyne) (has said. I Mr de Bruyne spoke at a (news conference introducing lan annual report which the world’s second (biggest oil company trebled jits net income in 1979, to $7OOO million. ! In 1980, he said, despite (production cuts by some (members of the Organisation I of Petroleum Exporting :Countries, the total oil supply situation should be reasonably balanced. “Barring accidents the oil is going to be there. Stocks are high. As long as people believe there is a reasonable balance we may see a far lessdramatic price explosion

i than in 1979 (when prices more than doubled). I “But Iran may provide such an accident,” Mr de : Bruyne said. Mr de Bruyne said Iranian . exports had declined — industry analysts believe they are down to about 1.5 inil-l lion barrels daily or 2 per( cent of world demand —I and “they are fickle.” ' j Enough oil was in the system to enable it to cope without them “except that it might create a frame of mind, a psychosis, that might drive the price of other crudes up.” Mr de Bruyne said supply would need to exceed demand by about two million barrels a day for the market to get out of what he called an “anxiety zone.” He and other Shell executives explained their assessment that, until Japan and some West European buyers were sure that the surplus was indeed that big, they

i would anxiously scramble to stockpile oil, keeping up prices. I Royal Dutch-Shell's managing director (Mr Robert ■ Hart) said he had hoped the! worid would emerge from! this “anxiety zone” this! (summer, but because of thel (Iranian crisis he now could : (only hope it would. i ( Mr de Bruyne said much 1 depended on whether Saudij Arabia kept output at its. present high level of 9.5 mil-! lion barrels a day. ( He said he thought the Saudis wanted to keep up output to stabilise the market and get O.P.E.C. to return to a unified pricing system when O.P.E.C. Oil Ministers meet in Algiers on June 9. Mr de Bruyne said the Shell group’s capital investment in 1980 would run at about $5750 million mostly spent on exploration and development of oil and gas resources.