Western oil demand rises sharply

Press, 6 March 1984, Page 27

Western oil demand rises sharply

NZPA-Reuter Paris Non-communist world oil demand in the first quarter of 1984 has grown faster than previously expected, led by North America and the Pacific, according to the International Energy Agency (lEA). The Paris-based agency says in its latest monthly oil market report: “First estimates for first quarter 1984 consumption show a sharp increase of 5.7 per cent for the Organisation for Economic Co-operation and Development (OECD) area as a whole.”

Both North America add the Pacific regions were experiencing colder than normal winters. But for the European region a continuing decline in consumption was expected, the lEA said. lEA officials said the latest figures based on data from oil companies and Western governments said pressure on the Organisation of Petroleum Exporting Countries (OPEC) had eased somewhat.

“But we are still looking for a decline in OPEC pro-

duction starting in March and stretching through the second quarter,” one official said.

The lEA said latest estimates for OPEC crude oil supply in February were 17.9 M barrels a day (bpd), only slightly down from a revised 18M bpd in January.

This is lower than an average OPEC supply of 18.9 M bpd in the fourth quarter of 1983, but above the OPEC crude quota level of 17.5 M bpd aimed at keeping market prices in line with its marker price of SUS 29 a barrel.

“The largest output drops have occurred in Saudi Arabia and some other Gulf States,” the lEA said. In. the first quarter of this year, consumption growth was strongest in North America, up 12 per cent to 18.8 M bpd, compared with the first three months of 1983. Consumption in OECD member countries in the Pacific region was up 7 per cent at 5.9 M bpd. But OECD Europe first quarter consumption was estimated at nearly 3 per

cent lower at 12.1 M bpd. Non-OPEC oil supply is expected to average 26.4 M bpd through the current first quarter period, the lEA said.

The latest lEA projections put the non-communist world’s oil demand in the second quarter 1984 at 44.1 M bpd, up 2.6 per cent on the same period a year ago.

With the non-OPEC supply in the same period put at 26.6 M bpd, demand for OPEC supplies could be as much as IM bpd below the official'quota level of 17.5 M bpd, lEA officials said.

This is the main challenge facing the OPEC market monitoring committee meeting in Vienna on Friday.

The market outlook for the OPEC producers depended on how much extra oil was currently being held in stock by companies because of the war between Iraq and Iran, for which there were no lEA estimates, the officials said.