Greenspan: Oil supplies to grow

Federal chairman says easing demand due to high prices will continue to boost inventories.
May 20, 2005: 12:43 PM EDT

NEW YORK (Reuters) - A modest easing in oil demand in response to higher prices should continue to boost inventories in the U.S. and elsewhere for some months, Federal Reserve Chairman Alan Greenspan said Friday.

Speaking to the Economic Club of New York, Greenspan pointed out that he had predicted in April when prices were spiking that he expected to see "an inventory buffer to damp the price frenzy."

Since then, inventories have grown to the point where U.S. crude oil stockpiles were near a six-year high, according to a government report issued this week.

"A somewhat lesser, but still important, accumulation of crude oil is evident in other major countries," Greenspan said. "Inventory accumulation is likely to continue unless demand rises, output declines, or we run out of storage capacity."


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