Ten-year oil glut forecast

Press, 27 October 1982, Page 6

Ten-year oil glut forecast

Parliamentary reporter

The oil glut should continue for the next 10 years, and consumer countries should not overdo development of oil alternatives, said a representative of the Organisation of Arab Petroleum Exporting Countries, Dr A. Al’ambari, in Wellington yesterday.

Dr Al’ambari is in New Zealand for a week as part of a good-will visit to increase co-operation between oil-producing and oil-consum-ing nations. He will talk with a number of Cabinet Ministers, and hold seminars.

He said yesterday that security of oil supply would be good for the next decade, although there might be some hiccups from political clashes in the Middle East.

In real terms, the price of oil would remain stable, although its dollar value would

rise to keep up with inflation and the rising value of the United States dollar, the currency in which oil is traded. Analysing the second oil shock in 1979-80, Dr Al’ambari said that the feared scarcity did not eventuate, but the panic reaction of oil companies put prices up as they stockpiled. The end of the Iran-Iraq war would extend the glut as the two countries returned to oil production.

Dr Al’ambari said that the main Western Powers were slowing, and in some cases abandoning, their alternative energy development plans as it became clearer that the glut would continue. Oil producers and consumers could find a compromise between premature depletion of oil reserves and oil conservation and alternative energy schemes, he said.