Oil Supply and Demand
Factors Affecting Levels, Distribution, and Prices
The world oil market was characterized by strong demand and growth that began in 2003 and continued through 2004 and into 2005. As a result of this growth, and the resulting high prices, consumers’ budgets were under pressure, the profits of energy producers were up, and the consuming nations again faced the economic and political costs of dependence on imported oil. Appropriate policy response to world oil market conditions may well depend on whether the factors that pushed the market to its current level are likely to be temporary or permanent. The lessons of past volatility in the oil market…
