Crude oil has always been a volatile commodity, but industry officials and the experts who follow it say that a number of factors are combining to increase volatility. That seems likely again this year, even though there is a widely held belief that crude prices should be somewhat lower in 1997. The volatile outlook for 1997 comes after a year in which prices had been predicted to remain relatively flat.
Analysts point to three main factors for the increased volatility.
Perhaps the biggest is the trend by refiners to keep stocks of both crude and refined oil as small as possible. That lowers their costs but means less of a cushion if demand or prices shift. Such an outlook has made some executives in the industry cautious in their planning. But, like most oil companies, Texaco is using a gloomier forecast. More swings are expected this year.