Slide 5 of 19
- During 1999, we saw stock draws during the summer months, when we normally see stock builds, and very large stock draws during the winter of 1999/2000.
- Normally, crude oil production exceeds product demand in the spring and summer, and stocks build.
- These stocks are subsequently drawn down during the fourth and first quarters (dark blue areas). When the market is in balance, the stock builds equal the draws.
- During 2000, stocks have gradually built, but following the large stock draws of 1999, inventories needed to have been built more to get back to normal levels.
- As we look ahead using EIA’s base case assumptions for OPEC production, non-OPEC production, and demand, we expect a more seasonal pattern for the next 3 quarters. But since we are beginning the year with continued low stock levels, a seasonal pattern will do nothing to build inventories to more normal levels.
- With stock levels remaining low for the year, EIA expects prices to remain around $30 per barrel for the next several months. Until inventories reach more normal levels, there is little flexibility to adjust to many of the uncertainties in the current global oil market.