Market Conditions, Developments and Structure

A comprehensive analysis of the oil market should cover not only developments in crude oil production and demand, but also changes in the major intermediate stages of production, and in the final product markets. The presence of large vertically integrated companies, with activities embracing the entire chain of production, necessitates the importance of analyzing the market in a broad sense. Moreover, the use of oil is no longer limited to a fuel, but has also developed into an important feedstock for the petrochemical industry. The number of final products derived from oil exceeds a hundred. Demand for oil is therefore influenced in various ways. Its energy use is determined by the fact that oil constitutes a major input in industrial production and in domestic consumption. Its non-energy use depends on developments in other industrial sectors. The evolution of refining and the petrochemical industry, and the continuous extension of the variety of its final products, has generated, to some extent, an ambiguous structure in the production line.