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Energy Dept. Predicts Slowing in U.S. Oil Demand Next Year

November 09, 1986|Associated Press

WASHINGTON — Growth of demand for petroleum products should slow sharply in the United States in 1987 as crude oil prices climb toward $17 a barrel by the end of the year, the Energy Department predicted Friday.

The department's quarterly forecast said demand would increase by only 1.4% during 1987 compared to 2.7% in 1986.

The price collapse this year has not stimulated demand to the extent many would have expected, said the Energy Information Administration.

Prices averaged $19 a barrel in the first quarter of this year and $12 in the third quarter. Prices are now about $15 a barrel.

Imports next year should reach 5.4 million barrels per day, the agency said. That would represent an 8% increase from an estimated 5 million barrels this year and a slowdown in growth from the 14% increase this year over 1985's 4.4 million barrels.

The price forecast of $17 assumes that the Organization of Petroleum Exporting Countries can maintain its agreement to hold production at current levels.

"Any major increase in OPEC oil production, however, could result in a sharp price decline," the forecast said.

"Contrary to what may have been expected . . . demand for petroleum products has not skyrocketed in response to these lower prices" of 1986, the analysts said.

Sluggish industrial growth was the "limiting factor" in demand for both petroleum and natural gas, with the exception of electricity production, the department said.

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