Future world oil prices: modeling methodologies and summary of recent forecasts

Technical Report · Mon Apr 01 04:00:00 EST 1985

OSTI ID:5879148

Curlee, T R

This paper has three main objectives. First, the various methodologies that have been developed to explain historical oil price changes and forecast future price trends are reviewed and summarized. Second, the paper summarizes recent world oil price forecasts, and, then possible, discusses the methodologies used in formulating those forecasts. Third, utilizing conclusions from the reviews of the modeling methodologies and the recent price forecasts, in combination with an assessment of recent and projected oil market trends, oil price projections are given for the time period 1987 to 2022. The paper argues that modeling methodologies have undergone significant evolution during the past decade as modelers increasingly recognize the complex and constantly changing structure of the world oil market. Unfortunately, at this point in time a consensus about the appropriate methodology to use in formulating oil price forecasts is yet to be reached. There is, however, a general movement toward the opinion that both economic and political factors should be considered when making price projections. Likewise, there is no consensus about future oil price trends. Forecasts differ widely. However, in general, forecasts have been adjusted downwardly in recent years. Further, an overall assessment of the forecasts and recent oil market trends suggests that oil prices will remain constant in real terms for the remainder of the 1980s. Real oil prices are expected to increase by between 2 and 3% during the 1990s and beyond. Forecasters are quick to point out, however, that all forecasts are subject to significant uncertainty. 69 references, 3 figures, 10 tables.

• Research Organization: Oak Ridge National Lab., TN (USA)
• DOE Contract Number: AC05-84OR21400
• OSTI ID: 5879148
• Report Number(s): ORNL/TM-9521; ON: DE85010123
• Country of Publication: United States
• Language: English

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