U.S. Rebuilds Oil Inventory
WASHINGTON (AP) _ The nation replenished its oil inventory last year, increasing imports as prices fell, the American Petroleum Institute reported today.
The booming economy fueled an increase in energy consumption in 1997, the industry group said.
But Edward H. Murphy, API director of finance and statistics, declined to predict oil prices and supplies for this year.
Asked if the economic problems in Asia will have an impact he said: ``Really, nobody knows,″ even though most experts expect lower demand for oil.
In 1996, U.S. oil imports were up 4.4 percent with the increases coming primarily from Mexico, Venezuela and Canada as worldwide production exceeded the growth of oil use.
As a result, U.S. petroleum inventories were built up at a rate of 161,000 barrels per day in 1997 and ended the year at about 1 billion barrels.
That’s about 60 million barrels more than at the end of 1996, when inventory declined 80,000 barrels per day.
``In retrospect, that was a wise decision″ to reduce inventory when prices were high and replenish at lower costs, said Murphy.
The average price of a barrel with 42 gallons of crude oil is $16.60, he said. A year ago it was $26.10.
Murphy attributed the drop to increased production, including the return of Iraqi oil to the world market.
Other findings of the group’s annual report:
_Oil production in the lower 48 states increased, though slightly, for the first time in six years due to the drilling of new wells and the use of new technology on deep wells in the Gulf of Mexico.
_Alaskan production continued to decline.
_Imports of crude oil and petroleum last year averaged 9.8 million barrels per day.
_U.S. dependency on imported oil rose from 51.8 percent to 53.1 percent of supply.
_ The biggest increases in demand were for diesel fuel, home heating oil, aviation fuel and chemicals.