OPEC miscalculations create energy illusion

Misconceptions about the current oil glut could lead to a false complacency. Projections of oil shortages developing in the latter 1980s because of economic recovery or another Middle East war should dispel illusions of a stable supply-demand relationship. A drop in total energy demand has produced a temporary surplus and broken the traditional growth-curve correlation with gross national product, but OPEC production miscalculations caused a drawdown of stocks below the replacement level. The oil price decline is counter to the escalating costs of other fuels, which account for 80% or more of commercial and industrial use. Energy management needs to reaffirm the importance of efficient energy use to account for the continuing variations and fluctuations in the supply and price of energy. (DCK)