The Oil Glut

Of course the world is running out of oil and the entire fossil fuel economy
is on borrowed time, which makes me wonder why there’s still so damn much
of the stuff around. A July 8 story by Reuters Information Service reported
that even with a rise in U.S. demand for oil, crude prices declined dramatically
this spring and are expected to fall even further when Iraq resumes exporting
oil.

The International Energy Agency
reported that its revised forecast of 1997 world oil demand was 73.8 million
barrels per day. At the same time world oil inventories rose an estimated 1.6
million barrels per day in the second quarter of 1997. The Washington-based
Petroleum Finance Company said, “… crude production will outstrip demand
by an average of one million bpd in 1997.

The result was predictable — crude oil futures have fallen 30 percent in 1997,
hitting a low of $17.32 in mid-June.

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