Asia vulnerable to oil supply disruptions: IEE<\/p>\n
TOKYO (Reuters): Energy-hungry Asian countries remain
\nvulnerable to possible oil supply disruptions with their
\nstockpile levels far less than those in developed nations, an
\nenergy think tank said yesterday.<\/p>\n
\"Most Asian countries have little more than running stocks
\nheld by refiners when it comes to oil stockpiles, let alone
\nnational strategic stockpiles,\" said Ken Koyama, senior economist
\nat the Institute of Energy Economics (IEE).<\/p>\n
Koyama spoke to reporters regarding a recent IEE study on
\nenergy security in seven Asian economies: China, South Korea,
\nTaiwan, Singapore, Thailand, the Philippines and Indonesia.<\/p>\n
Among the seven nations, South Korea is the only one holding
\nnational stockpiles, while China and Singapore do not even
\nrequire oil firms to maintain a certain amount of stocks for
\nemergencies, he said.<\/p>\n
Stockpiles in China are estimated to cover only 20 days of
\ndomestic demand, the lowest level among the seven countries.<\/p>\n
The oil stockpiles of member nations of the Organization for
\nEconomic Cooperation and Development (OECD) on average cover 89
\ndays of domestic consumption.<\/p>\n
Taiwan and South Korea maintain relatively high stock levels,
\nreflecting concerns over energy security amid ongoing tensions
\nwith neighboring countries, Koyama said.<\/p>\n
Taiwan maintains oil stockpiles covering 60 days, while South
\nKorea's stockpiles, including both national stockpiles and those
\nheld by oil firms, amount to 53 days of domestic consumption.<\/p>\n
Oil stocks in Indonesia, Singapore and Thailand total 34, 35
\nand 36 days of consumption, respectively, while the Philippines
\nholds a 50-day supply of oil stocks, he said.<\/p>\n
Japan, which imports more than 99 percent of its domestic
\ncrude oil needs, keeps about a 156-day oil stockpile, equally
\ndivided between national stockpiles and private stocks held by
\noil firms.<\/p>\n
Although Asia is one of the world's fastest growing areas in
\nterms of oil demand, oil production in the region has been
\nstable, raising its dependence on oil imports from the Middle
\nEast.<\/p>\n
London<\/p>\n
Meanwhile, oil markets opened higher in nervous early trade in
\nLondon yesterday after the United Nations Security Council late
\non Wednesday condemned Iraq's decision to bar Americans from U.N.
\nweapons inspections teams.<\/p>\n
Warning of \"serious consequences\" the 15-member Council late
\non Wednesday demanded that Iraq cooperate fully with the U.N.
\nspecial commission (UNSCOM) set up after the Gulf War to
\neliminate Iraqi weaponry.<\/p>\n
London December futures for benchmark Brent blend opened 16
\ncents higher at $19.94 a barrel.<\/p>\n
The U.N. warning followed an ultimatum from Baghdad giving
\nAmericans in the U.N. arms team in Iraq a week to leave the
\ncountry.<\/p>\n
UNSCOM immediately suspended all field operations in the
\ncountry, such as inspecting sites, but continued other duties.<\/p>\n
The escalating tension triggered renewed concerns among oil
\ndealers that Baghdad might decide not to renew crude exports
\nunder the U.N.'s oil-for-food exchange when the deal comes up
\nreview in December.<\/p>\n
Oil traders and analysts remained skeptical and feared
\nescalating tensions might put a halt to the oil sale program.<\/p>\n
\"At the moment the chances are the oil-for-food deal will get
\nrenewed,\" said Mehdi Varzi, oil analyst at Dresdner Kleinwort
\nBenson Securities in London.<\/p>\n
At stake for world oil markets are about a million barrels
\ndaily of Iraqi sales in the special oil-for-food arrangement
\naimed at getting food and medicine to Iraq's poor.<\/p>\n
Amid booming oil winter demand a reduction in supply of that
\nstature could send crude spiraling, even though Western stocks of
\noil are comfortable, dealers said.<\/p>\n
\"That would be serious for the market and could lead to a rise
\nof $2 or $3 a barrel,\" said oil analyst John Toalster at Societe
\nGenerale in London.<\/p>",
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