2002 - OPEC

16
Stock movements
At the end of 2002, OECD commercial oil stocks displayed a strong draw of 154 million barrels or
420,000 b/d over 2001 to 2,467m b (see Table 6). This level covered 51 days of forward consumption,
four days lower than the level registered the previous year. Most of the draw took place on crude oil
inventories, which fell by 99m b, or 270,000 b/d to 1,105mb, followed by product stocks, which declined
by 55m b, or 150,000 b/d to 1,362m b. On a regional basis, North America was the main contributor to the
draw on OECD commercial stocks, where they decreased by 91m b to 1,172m b, followed by OECD Pacific
and OECD Europe, where they showed draws of 33m b to 410m b, and 30m b to 885m b, respectively.
Several factors were behind the draw on OECD stocks, mainly increasing refinery runs in the US and
Europe to meet demand, especially for distillate, due to cold weather conditions, and the interruption
in supplies from Venezuela due to the general oil workers’ strike. The draw on Japan’s stocks resulted
from a strong increase in demand for heating oil, which resulted from shutdowns of nuclear power
plants. In contrast to the draw on OECD commercial oil stocks, the Strategic Petroleum Reserve (SPR)
in OECD regions registered a build of 57m b to 1,343m b. This build took place mainly in the US as
SPR levels increased by 49m b to 601m b in line with the Government’s decision to bring its total
level up to 700m b by 2005. Oil on water, which includes oil in transit and oil afloat, declined by
18m b to 811m b. The above stock movement changes resulted in a draw on total world oil stocks of
141m b or 390,000 b/d to 5,639m b during the year.
Balance of supply and demand
As indicated in Table 7, the significant increase in non-OPEC supply, compared with the slower rate of
increase in world demand, resulted in a supply/demand difference of around 25.5m b/d. OPEC crude
oil production declined significantly by around 1.9m b/d to 25.3m b/d, resulting in a near balanced
supply/demand picture. This represented a minor stock draw of around 100,000 b/d.
Oil price movements
The yearly average of the OPEC Reference Basket moved up by $1.24/b on a y-o-y basis (2002 vs
2001). It ended the year at $24.36/b with a healthy rise of 5.4 per cent, with most of the gains
occurring in the second quarter when the Basket rallied by a healthy $4.68/b (see Figure 3, page 18).
The bullish sentiment prevailed throughout the year. Concern over low crude oil stocks and possible
supply interruptions from some OPEC Member Countries were the dominating factors in the price rally.
This was exacerbated by the looming threat of a US-led invasion of Iraq, which drove the OPEC Basket
price well above the upper limit of the price band towards year-end.