Oil Market Structure
The Role of OPEC, Speculation, and Refinery Capacity
The average petroleum spot price (APSP) rose by about 31 percent during 2004 and by a further 50 percent in 2005 to reach a record high of $65 U.S. dollars in late August. In contrast to previous episodes of oil price hikes, longer-dated future prices have also surged and become quite sensitive to daily movements in spot prices. Moreover, the price differential between light-sweet and heavy-sour crude oil has risen to historical highs, while, as in the past, petroleum product prices have increased broadly in line with crude oil prices.Although many factors have contributed to higher crude oil prices, a…
