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Oil inventories atlLevel to threaten global economy Filed: 03/15/2000

By James McDonald c.2000 Bloomberg News

Tokyo, March 15 (Bloomberg)  Oil inventories have fallen to levels that could put the global economy at risk unless OPEC and other producers increase output soon, said a senior U.S. energy official.

As the world's two leading consumers of crude oil, Japan and the U.S. "share the objectives of price stability, sustaining world economic growth and sustaining the recovery here in Asia," said David L Goldwyn, assistant secretary of energy for international affairs.

Attention in both countries is on the March 27 OPEC meeting, where oil producers will decide whether to increase production after prices tripled in the past year. Neither Japan nor the U.S. are looking at releasing oil reserves at the moment, Goldwyn said.

"We hope by a combination of common sense on the part of the OPEC producers and some persuasion on our part that they'll reach the right decision," Goldwyn said. He is in Tokyo to brief the government on the U.S. view of oil markets.

The year-old cut in oil production is already causing suffering in India and other developing nations, though there is no parallel with the oil shortages of the 1970s, he said. It shouldn't be necessary for countries to dip into their inventories.

"I don't expect lines at the gas pump this summer," said Goldwyn.

If OPEC doesn't increase production after March, the U.S. has many more options now for alleviating the pressure of the oil cutbacks, including selling or swapping oil from its Strategic Petroleum Reserve, he said.

http://www.bakersfield.com/oil/i--1259012137.asp

-- Martin Thompson (mthom1927@aol.com), March 16, 2000