The Impact of Downstream Refinery Concerns on the International Oil Market

Abstract

This article looks at the difficulties experienced by the international oil market in 2004, in the context of the heavy pressure that has been put on stability and prices by downstream refinery problems, even though the market has remained well-supplied with crude. It notes the efforts OPEC has made to maintain a reasonable market balance, in particular by accelerating the implementation of production expansion plans to increase the excess supply cushion. But it seems that, along with a tight market for light sweet crude oil, problems in the downstream sector will remain major upside risks for the market in 2005, risks that require urgent attention.