IEA: Winter Oil Inventories Plummet

Oil inventories fell sharply again in October and stockdraws in major consuming regions are expected to accelerate in coming winter months, the International Energy Agency (IEA) said last week. Commercial inventories in the industrialized nations of the OECD fell 440,000 bpd in October after an unusually large 1.56 million bpd draw in September, IEA said in its monthly Oil Market Report. "This is a thirsty oil market waiting for more oil which will have to come from OPEC." OECD industry stocks by end October stood 15 million barrels below end-October 1997 and within 100 million barrels of their lows in October 1996. "Continued rapid declines in November may indeed have brought OECD industry stocks almost to the 1996 level," it added. Total OECD industry crude and petroleum products stocks by end October were 2.659 billion barrels from an upwardly revised 2.672 billion at end September. The agency said North America, the world's largest oil Consuming region, bore the brunt of the October stockdraw. Inventories in the U.S. dipped 755,000 bpd in October and 1.25 million bpd through most of November. "The U.S. stockdraw in December could approach two million bpd," it added. North American OECD stocks at end-October stood 14 million barrels below 1997 levels and just 62 million barrels over the historic lows of 1996. Pacific OECD stocks rose in October by 270,000 bpd but were lower than at the same time in 1996. European OECD inventories rose by 50,000 bpd to stay 42 million above 1996 levels. The IEA said this year's recovery in oil prices had yet to make any major impact on commercial upstream activity, leaving OPEC as the only source of extra supply to meet rising demand. "Oil supply from outside OPEC is increasing much less rapidly than demand," it said. "Little of the production that was shut in or lost due to lack of workovers and other upstream investment during last year's price collapse has reappeared."