Chapter IV: will the oil market continue to be tight?

World Economic Outlook, April, 2005 by Sommer, Martin

During most of the 1990s, real crude oil prices (expressed in 2003 dollars) fluctuated about $20 a barrel. Moreover, the oil market experienced periods of high volatility only during the Middle East conflict in 1990-91 and during the Asian currency crisis in 1997-98. Crude oil prices started edging up with the economic recovery and production cuts at the end of the decade, but the upward price pressures became pronounced only during 2003-04. Synchronized global growth, high oil demand (especially from China), and a series of supply disruptions eroded spare capacity of producers and pushed the annual real average price of oil close to $40 a barrel in 2004 (Figure 4.1). Average oil prices increased further to about $50 a barrel in March 2005.

[FIGURE 4 OMITTED]...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.