Oil use tipped to rise in 1987

Press, 13 January 1987, Page 5

Oil use tipped to rise in 1987

NZPA-Reuter Paris Oil consumption in Western countries is likely to rise in 1987 but at a slower rate than in recent years, according to International Energy Agency forecasts.

Oil use in the 24 member countries of the Organisation for Economic Co-operation and Development would increase 1.5 per cent in the first nine months of the year after a 2.5 per cent rise during 1986 to 34.8 million barrels a day, said the agency in its latest monthly oil market report.

Expectations are that O.E.C.D. oil consumption will rise about 2 per cent in the first quarter of the year to 36 million barrels a day, slow to a 1 per cent rise in the second quarter before picking up again in the third quarter. The agency’s report, based on the assumption that oil prices remain at today’s levels and that

weather patterns are normal, said second quarter consumption would be slower as companies were expected to reduce stockpiles built up last year. It noted that consumption was relatively stable in the Pacific last year while there was a 2 per cent year-on-year increase in North America and a 4 per cent rise in Europe. In spite of recent growth, O.E.C.D. oil use last year was still nearly seven million barrels a day below the 1979 peak, mainly because of lower heavy fuel oil sales, it said.

Use of heavy fuel oil, for industry, power stations, heavy vehicles and shipping, is expected to continue to decline this year as natural gas is projected to regain much of the market it lost to heavy fuel in the United States and Europe in 1986. The report said initial data for January 1, 1987, indicated that oil stocks on land in O.E.C.D. countries totalled 443 million tonnes, representing 97 days of forward consumption.

This compared with 426 million tonnes and 93 days on January 1 last year.

Company stocks on land in the O.E.C.D. on January 1, 1987 were put around 342 million tonnes, representing 75 days of forward consumption, 13 million tonnes higher than a year earlier, The agency said that company stocks were estimated to have declined 1.1 million barrels a day in the last three months of 1987 after in-

creasing 1.1 million and two million barrels a day in the second and third quarters, respectively.

Oil stocks on land in the United States and Canada on January 1, 1987, were estimated at 217.1 million tonnes, representing 98 days of forward consumption, against 208.7 million and 94 days on July 1, 1986 and 206.2 million and 94 days on January 1, 1986.

In Europe, stocks on land on January 1 were put at 154.1 million tonnes, giving 93 days of forward consumption, compared with 146 million and 96 days on July 1, 1986 and 148.4 million and 90 days on January 1, 1986. The report gave no estimates for O.P.E.C. output for this year but the data suggests non-Com-munist world demand for O.P.E.C. crude in Janu-ary-March, 1987, of 18.5 million barrels a day, market experts said. This compares with O.P.E.C.’s recently-agreed ceiling of 15.8 million barrels a day for the first and second quarters. The report said total O.P.E.C. crude production in the fourth quarter 1986 was 16.9 million barrels a day, approximately matching O.P.E.C.’s effective ceiling for the period, compared with 19.3 million the previous quarter and 17.6 million in October-December, 1985. The output drop was due to over-production by Arab Gulf states being largely offset by underproduction in Iran because of damage to oil installations from the war with Iraq.