PARIS, 12 February 2004 — Oil stocks in the United States remain tight but are being replenished in Europe and the Pacific region, the International Energy Agency reported yesterday.
But industrial stocks fell by 1.26 million barrels per day in December in countries belonging to the Organization for Economic Cooperation and Development, the Paris-based IEA said. “Global stocks have a potential for growth in the next few months subject to the pace of the economic recovery and producer supply policies,” it said in its monthly report for January.
“A return to more normal inventory conditions should ease price and market volatility,” it also said. For several months the agency has urged OECD countries to build up their stocks of oil which it said were running at worryingly low levels.
The agency said yesterday that it had increased its estimate for the rise in world demand for oil in 2004 by 220,000 barrels per day to 1.4 million barrels per day, noting that demand was being stimulated by China. “Oil demand growth is surging in some developing economies - led in part by strong economic growth in China and the region - but appears to be temporarily slowing in the OECD,” it said.
However, demand in China, which has recently become the second-biggest oil consumer in the world after the United States but before Japan, was seen leveling off.
“Chinese apparent demand — the sum of domestic product output and net product imports — appears to have reached a plateau near the record 5.8 million bpd (barrels per day) around which it has been hovering since August,” the IEA said.
Oil supply leveled off in January with production from non-OPEC members making up for a fall in production from the Organization of Petroleum Exporting Countries.
Nevertheless, OPEC output was well above its quota of 24.5 million bpd with the 10 members, but excluding Iraq, pumping 25.8 million bpd.
The 11-nation organization, which produces a third of the world’s oil, decided Tuesday at a meeting in Algiers that it would reduce the output ceiling by one million bpd to 23.5 million bpd, effective April 1.”
In addition, production over the quota that had been stimulated by high demand and high prices is to be eliminated by the end of March, with the excess estimated at 1.5 million bpd, OPEC ministers said.
Meanwhile, oil prices steadied yesterday. London benchmark Brent crude futures rose 11 cents to $30.15 a barrel after hitting a high of $30.47 on Tuesday.
US light crude, which surged more than $1 a barrel in the previous session, was up 18 cents at $34.05 a barrel.
