thr 098 Oil-Shortages  Oil Refinery Restrains Continue Despite Increased OPEC Supplies London, Nov. 1, IRNA -- Global oil market still faces shortages of product supply in the coming winter despite new efforts by the Organisation of Petroleum Exporting Countries (OPEC) to remove possible crude shortages.

OPEC announced Monday that it is going to increase its production by 500,000 bpd as from November 1st, the fourth this year, but the nnouncement has had little cooling effect on the market. Dated Brent crude oil prices in London dropped only 78 cents to little over dlrs. 30 per barrel, suggesting that it is not the shortages of crude but the product supply that is the real driving force behind the current strength of the oil market. The London-based Petroleum Argus in its latest issue estimated that global demand for oil over the next six months will exceed 78.5 mbpd, which after allowing for refinery gains leaves a required capacity of 77 mbpd to satisfy demand. This worries analysts, as the capacity of refineries is barely 81 mbpd, of which 5 m is old and inoperable plants in the former Soviet Union. "This leaves little leeway for refiners to satisfy demands," commented the weekly.

Greater supply of crude oil, analysts believe, will not alleviate the problem of product shortages such as heating oil, where particularly in the Atlantic coast, the main global heating market, shortages are widespread. Since the sharp drawdown of last January, Global Market estimated, only 7 m barrels of heating oil have been added to the stock in this area.

Severe shortages are therefore on the cards in US as it prepares to draw substantially from its reserve stocks in order to meet the winter demand, expected to be much colder than last year and there is nothing OPEC can do about that. MEM/JA/JH END

http://www.irna.com/newshtm/eng/11174358.htm ::irna 01/11/2000 17:43

-- Martin Thompson (mthom1927@aol.com), November 02, 2000