As OPEC oil ministers gather this week in Geneva in search of the still elusive unified cartel oil price, the Department of Energy reports that American demand for oil, like that of the Western nations generally, continues its downward march. U.S. oil imports have been running significantly below last summer's level. The trend--despite the economy's recovery from the 1980 recession--is still clearly down.
Gasoline usage is more uncertain. Early indications are that this summer Americans are driving somewhat more than in the past few vacation periods, but the greater number of more efficient cars on the road is keeping total consumption down.
Despite the fact that Iranian and Iraqi oil production has only rebounded to about a third of its pre-war level, the international oil market remains extremely soft, providing Americans with a welcome buffer against sudden price increases. Oil company inventories are far above normal for this time of year. More important, purchases for the Strategic Petroleum Reserve--the stockpile meant to protect the nation from another oil embargo--are rolling along at record rates. At the beginning of the year, the government was buying about 100,000 barrels a day--a rate that would have filled the reserve in about a quarter of a century. For the past several months, purchases have been four to five times that level.
The good news in all of this is that improvements in the efficiency of energy use are continuing throughout the economy. The not-so-good news is that this is happening more slowly than it could, or than the country's interests dictate. Progress is still very much controlled by short-term swings in oil prices, slowing markedly when ever "surplus" appears in the market. That surplus can disappear quickly with a cut in Saudi Arabia's production. The long-term reality, what ever OPEC decides in Geneva this week, is that oil is a disappearing resource.