National Energy Plan II, May 1979. Appendix A: world oil prices

Technical Report · Mon Jan 01 04:00:00 EST 1979

DOI:https://doi.org/10.2172/5474380· OSTI ID:5474380

In formulating the Second National Energy Plan (NEP-II) the US DOE recognized the immense uncertainty related to forecasting world oil prices - whether the forecast is for next year, a decade from now, or for the year 2020. Recognition of uncertainty, however, does not help government or private decision makers who must base today's energy decisions on some expectation about future world oil prices. Thus, NEP-II, published in May 1979, provides a range of reasonable and internally consistent expectations about future world oil prices for use in performing domestic energy analysis. This appendix reports the detailed assumptions and projections used to develop the NEP-II world oil price cases. This report consists of three major sections. The first section presents assumptions about potential world demand and production of oil, assuming constant real future world oil prices. Included is a discussion of alternative theories of OPEC behavior. The second section presents world oil price paths generated by mathematical models of world oil supply and demand. The models calculate oil prices that act through price elasticities to change the assumed constant-price oil demand and supply conditions to achieve a balanced oil market. The final section synthesizes the various model projections into the range of world oil price cases used in NEP-II and reports major conclusions resulting from the world oil price analysis.

• Research Organization: Department of Energy, Washington, DC (USA). Office of Analytical Services
• OSTI ID: 5474380
• Report Number(s): DOE/TIC-10203(App.A)
• Country of Publication: United States
• Language: English

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