WILL THE OIL MARKET CONTINUE TO BE TIGHT?

摘要

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. Should policymakers be concerned about developments in the oil market? While the percentage increase in the real oil price has been much smaller than during the 1970s, Chapter I of this World Economic Outlook suggests that the recent oil price increases may still have a non-negligible impact on the world economy—GDP growth is expected to slow by 0.7-0.8 percentage points in 2005-06 relative to 2004, with oil prices being one of the contributing factors.