Oil Supplies Drop, Signaling Glut Ending, IEA Says Paris, Nov. 9 (Bloomberg) -- Global oil inventories plunged
in September and demand is rising, signaling the end to a
worldwide oil glut could come as early as this month as producers
restrain output, the International Energy Agency said.
Inventories fell by 1.8 million barrels a day in September
in Organization for Economic Cooperation and Development
countries as consumers drew on stockpiles to make up for a
shortage of supplies from exporting nations, the agency said in
its monthly report. The drop was the biggest for a September this
decade and only the fourth decline in that month since 1990.
After months of speculation on when oil inventories might
begin to fall, the report confirms expectations that supplies are
receding following a pledge by the Organization of Petroleum
Exporting Countries and several other countries to reduce output
by 7 percent.
``We're very close to (the glut) being gone,' said David
Knapp, head of the Paris-based agency's oil industry and markets
division. ``The October draw (on stockpiles) will take off what
is left.'
Oil inventories in developed countries in October probably
fell by 2.5 million barrels a day, exceeding the September plunge
and signaling the oil glut could be over as early as mid-
November, Knapp said.
OPEC members met 87 percent of promised production cuts in
October, down from a revised 91 percent in September, according
to the agency. The IEA's estimate is at the higher end of
assessments of OPEC compliance last month, which range from 84.4
percent to 88.3 percent.
In London, Brent crude oil rose as much as 30 cents, or 1.3
percent, to $23.58 a barrel. Oil fell below $10 a barrel in
December as world inventories accumulated.
Outlook
The IEA maintained its forecast for global oil demand next
year of 77.1 million barrels a day, up 2.4 percent from this
year, the second straight month it has left the figure unaltered.
World oil demand will be 77 million barrels a day during the
fourth quarter of this year, rising to 78 million barrels a day
in the first three months of 2000, the report said.
Global oil output in October averaged 74.1 million barrels a
day, up from 73.3 million barrels a day a month earlier, the IEA
report said. Non-OPEC countries accounted for almost 85 percent
of the increase, the agency said.
Non-OPEC oil supplies averaged 44.9 million barrels a day
last month, the IEA said, up from 44.3 million in September. The
increase would have been bigger had it not been for a production
shutdown at Phillips Petroleum Co.'s Ekofisk oil field, Norway's
second-largest, the report said.
The IEA member countries include Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand,
Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the U.K.,
and the U.S. Although Iceland is a member of the OECD, it didn't
join the IEA.
Since August 1998, the IEA included the Czech Republic,
Korea, Mexico and Poland. Hungary has been included since October
1997.
Following is a table of supply and demand in millions of
barrels a day:
1Q99 2Q99 3Q99 4Q99 1999 2000
Total world demand 76.5 73.1 74.8 76.9 75.3 77.1
OPEC crude oil supply 27.1 26.1 26.1 N/A N/A N/A
Total Supply* 75.2 72.9 73.4 N/A N/A N/A
*includes natural gas liquids |
