Oil in surplus this year-end compared with usual deficit

Oil in surplus this year-end compared with usual deficit: Purnomo

Jakarta (Platts)--13Dec2004


The world oil market has surplus of around 1-mil b/d this year-end compared
with a deficit of 600,000 b/d seen in the same period in previous years hence
OPEC decided to cut output, OPEC's Indonesian president Purnomo Yusgiantoro
said Monday, defending the group's decision in Cairo to cut production by
1-mil b/d from January. "The recent drop in oil prices is because of
over-supply this month," Purnomo said. January West Texas Intermediate settled
at $40.71/bbl on the New York Mercantile Exchange on Dec 10, down 17% from its
Nov 30 settle and down 27% from a record high of $55.67/bbl made in October
this year. OPEC also expects world oil demand to be lower at 82-mil b/d in the
second quarter of 2005 compared with the cartel's earlier forecast of 83-mil
b/d, Purnomo said. "Oil demand will drop next year due to slower global
economic growth of 4% compared with 4.8% this year," he told reporters in
Jakarta.

Asked whether OPEC will cut output at its January meeting, Purnomo said: "OPEC
will review oil demand and prices before making any decision." OPEC ministers
agreed Dec 10 to cut 1-mil b/d of excess crude supply and bring output back to
the 27-mil b/d ceiling that came into effect in November. They also agreed to
meet Jan 30 in Vienna to consider further output adjustments. OPEC-10
(excluding Iraq) produced 28.02-mil b/d in November. (See story at 0111 GMT)

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