Knoema: Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030

[Tom Kirkman + 8,860]

I'm not endorsing or promoting Knoema, but I do find their oil price trends / data analysis interesting.

Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030

Brent crude oil prices will average $72.8 per barrel in 2018 and to $73.7 per barrel in 2019, according to the most recent forecast from the US Energy Information Administration's monthly Short-Term Energy Outlook (EIA). This reflects an upward revision of $9.5/barrel to the EIA forecast for 2018 compared to last month's Outlook.

• The OECD Economic Outlook as of May 2018 was less bullish, pegging the real price of a barrel of Brent oil— i.e. price adjusted for inflation—at $69.4/barrel in 2018.
• Looking out to 2020, the IMF in its Primary Commodity Prices Projections released in July asserted that after modest growth in 2018, the nominal price of Brent crude will increase to $53.5/barrel by 2020 and West Texas Intermediate to $50.4/barrel.
• The World Bank anticipates that all three major benchmark oil prices, Brent, WTI, and Dubai, will continue to increase after 2020 to reach $70 per barrel in 2030.

[Tom Kirkman + 8,860]

For lurkers, here's a thumbnail of my oil price hopes over the last few years, since the last oil price crash:

● My hope for 2015, 2016 and 2017 was $50 to $60 oil. 

● My hope was leaning closer to $50 in 2015, leaning more toward $55-ish in 2016, and leaning closer to $60 in 2017.

● My hope for 2018 is / was $65 oil. 

● My hope for 2019 is $70 oil.

To me, $70 oil in 2019 is probably a relative balance between being not too high to hurt global economies, and not to low to inhibit oil companies from new exploration and production activities.

Also it's important to note the distinction between hoping and predicting.

Just my opinion; as always, you are free to disagree.

[DA? + 301]

Just out of interest is there a place where previous crystal ball predictions of the various players can be found and compared to reality over the years?

[Tom Kirkman + 8,860]

Just now, DA? said:

Just out of interest is there a place where previous crystal ball predictions of the various players can be found and compared to reality over the years?

Not sure.  I used to have 8,000 comments and articles on the now defunct Oilpro forum, but all content on that forum was erased from the internet when Oilpro was shut down.

Some of the former Oilpro crowd that lurk here can probably vouch for my comments above, as I tend to be a tad bit talkative and endlessly repetitive about points I try to drive home.

Did I forget to mention yet that my hope for 2018 is / was $65 oil and my hope for 2019 is $70 oil?  Just in case anyone was curious  

[Dan Warnick + 6,100]

2 minutes ago, Tom Kirkman said:

Did I forget to mention yet that my hope for 2018 is / was $65 oil and my hope for 2019 is $70 oil?  Just in case anyone was curious  

Well sir, you can get off the bus when it stops briefly at $65, before it goes down under.  Ha-ha!

[BillKidd + 139]

5 hours ago, Tom Kirkman said:

For lurkers, here's a thumbnail of my oil price hopes over the last few years, since the last oil price crash:

● My hope for 2015, 2016 and 2017 was $50 to $60 oil. 

● My hope was leaning closer to $50 in 2015, leaning more toward $55-ish in 2016, and leaning closer to $60 in 2017.

● My hope for 2018 is / was $65 oil. 

● My hope for 2019 is $70 oil.

To me, $70 oil in 2019 is probably a relative balance between being not too high to hurt global economies, and not to low to inhibit oil companies from new exploration and production activities.

Also it's important to note the distinction between hoping and predicting.

Just my opinion; as always, you are free to disagree.

One thing you might do is anytime you write about oil, tag with whether you mean Brent or WTI. Obviously, can mean a significant difference!

[BillKidd + 139]

1 hour ago, DA? said:

Just out of interest is there a place where previous crystal ball predictions of the various players can be found and compared to reality over the years?

I don't know of such a place but IMO, it's ludicrous to think anyone can predict oil prices. In my 40 year career, *if* I would have kept an ongoing journal of just what you ask, it would be eye-opening just how true my statement is.

[Tom Kirkman + 8,860]

32 minutes ago, BillKidd said:

One thing you might do is anytime you write about oil, tag with whether you mean Brent or WTI. Obviously, can mean a significant difference!

Good idea.  I can be lazy.  Unless otherwise specified, over the years I generally mean Brent unless specified otherwise.  WTI is a different animal altogether.

[Dan Warnick + 6,100]

7 minutes ago, Tom Kirkman said:

Good idea.  I can be lazy.  Unless otherwise specified, over the years I generally mean Brent unless specified otherwise.  WTI is a different animal altogether.

Aha!  Good idea indeed.  So you mean to say you hope for $65 Brent?  Makes more sense then.

[Tom Kirkman + 8,860]

3 minutes ago, Dan Warnick said:

Aha!  Good idea indeed.  So you mean to say you hope for $65 Brent?  Makes more sense then.

Yes.  I don't live in the U.S. 

WTI is a peculiar beast, and I generally mean Brent when I refer to oil prices.

[Tom Kirkman + 8,860]

2 hours ago, DA? said:

Just out of interest is there a place where previous crystal ball predictions of the various players can be found and compared to reality over the years?

On one of my old hard drives, I stumbled across a Word document of one of my old articles for Oilpro from 2015.  The Word doc is attached for download.  Thought this was lost when the old Oilpro forum shut down.

If you recall some of my earlier comments about my views on Oil prices, from 2015 to 2017 I had hoped for an average of $50 oil prices.  Ever wonder where I got that $50 number from?  It wasn't a random number.  The number for those 3 years was my best guesstimate for a Goldilocks oil price - not too high for the global economy, and not too low for oil producers.

(This year, I finally upped my guestimated Goldilocks price to $65, but this comment is about the past, not the present.)

Anyway, here you go, I wrote this 3 years ago; download the Word document if you want all of the embedded hyperlinked dox for prices.  ...

[Top Oil Trader + 469]

Tom for oil to hit 50 that means were in some kind of recession

[Robert Ziegler + 121]

11 hours ago, Tom Kirkman said:

I'm not endorsing or promoting Knoema, but I do find their oil price trends / data analysis interesting.

Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030

Brent crude oil prices will average $72.8 per barrel in 2018 and to $73.7 per barrel in 2019, according to the most recent forecast from the US Energy Information Administration's monthly Short-Term Energy Outlook (EIA). This reflects an upward revision of $9.5/barrel to the EIA forecast for 2018 compared to last month's Outlook.

• The OECD Economic Outlook as of May 2018 was less bullish, pegging the real price of a barrel of Brent oil— i.e. price adjusted for inflation—at $69.4/barrel in 2018.
• Looking out to 2020, the IMF in its Primary Commodity Prices Projections released in July asserted that after modest growth in 2018, the nominal price of Brent crude will increase to $53.5/barrel by 2020 and West Texas Intermediate to $50.4/barrel.
• The World Bank anticipates that all three major benchmark oil prices, Brent, WTI, and Dubai, will continue to increase after 2020 to reach $70 per barrel in 2030.

My hope was it stays at $100 for the next 5 years (and the past 3....). It is simply not true that such an oilprice harms the economy, it just leads to a more value driven energy supply: Saudi would not use several million bbl/d to get the salt out of the water for instance, if they could sell it for $$$. Oil & Gas are simply too cheap at $$/bbl of the Fed Funny Money.

[ronwagn + 6,290]

31 minutes ago, Robert Ziegler said:

My hope was it stays at $100 for the next 5 years (and the past 3....). It is simply not true that such an oilprice harms the economy, it just leads to a more value driven energy supply: Saudi would not use several million bbl/d to get the salt out of the water for instance, if they could sell it for $$$. Oil & Gas are simply too cheap at $$/bbl of the Fed Funny Money.

It is refreshing to hear that nobody seems to think that there is a looming oil shortage in the next few years. I don't think we have thoroughly searched the entire globe for oil, natural gas or anything else. 

[SERWIN + 749]

59 minutes ago, ronwagn said:

It is refreshing to hear that nobody seems to think that there is a looming oil shortage in the next few years. I don't think we have thoroughly searched the entire globe for oil, natural gas or anything else. 

But for the most part the "easy" oil has been used up, and fracking is not a long term sustainable solution. That is why we are in the North sea with the Brutal conditions, or in Alaska, or miles deep in the Gulf of Mexico, etc. 100 years ago we basically dropped a drill bit on the ground in some places and the oil came shooting out of the ground, and some places it actually seeped out onto the ground. Those days are long gone now.

[Tom Kirkman + 8,860]

8 hours ago, Top Oil Trader said:

Tom for oil to hit 50 that means were in some kind of recession

Re-read my comments above.  I wrote that hope for $50 3 years ago.  And I laid out my general tineline fairly clearly.

My current hope is for $70 in 2019.  Brent, not WTI.

[Tom Kirkman + 8,860]

4 hours ago, Robert Ziegler said:

My hope was it stays at $100 for the next 5 years (and the past 3....). It is simply not true that such an oilprice harms the economy, it just leads to a more value driven energy supply: 

India, China, Japan and a host of other oil importing countries would probably beg to differ with you.

In my view, not only is $100 oil (Brent) not sustainable, neither is $80.

Currently, my main reason for hoping for $70 oil next year is an acknowledgement that new O&G exploration and production is lagging, and oil companies need sufficient profits in order to reinvest in new exploration and new projects.

Just my opinion; as always, you are free to disagree.

[Top Oil Trader + 469]

ah indeed. 

[Dan Warnick + 6,100]

26 minutes ago, Tom Kirkman said:

India, China, Japan and a host of other oil importing countries would probably beg to differ with you.

In my view, not only is $100 oil (Brent) not sustainable, neither is $80.

I kind of got the impression that our friend was looking at this question with regards to the U.S. economy.

[Top Oil Trader + 469]

well $80 long term would bankrupt some countries if it costs saudis $3 to make why sell at 80. this explains all the bentleys

[ronwagn + 6,290]

3 hours ago, SERWIN said:

But for the most part the "easy" oil has been used up, and fracking is not a long term sustainable solution. That is why we are in the North sea with the Brutal conditions, or in Alaska, or miles deep in the Gulf of Mexico, etc. 100 years ago we basically dropped a drill bit on the ground in some places and the oil came shooting out of the ground, and some places it actually seeped out onto the ground. Those days are long gone now.

You could be right about that but I don't think so. I know that might be true of oil but not natural gas. Horizontal drilling, hydrofracking and other technologies have totally changed the potential finds. There are huge natural gas finds in many areas of the world. They are just waiting to be tapped. Floating LNG plants can be set up in any coastal area and transfer to LNG carrying ships. 

[Robert Ziegler + 121]

7 hours ago, Tom Kirkman said:

India, China, Japan and a host of other oil importing countries would probably beg to differ with you.

In my view, not only is $100 oil (Brent) not sustainable, neither is $80.

Currently, my main reason for hoping for $70 oil next year is an acknowledgement that new O&G exploration and production is lagging, and oil companies need sufficient profits in order to reinvest in new exploration and new projects.

Just my opinion; as always, you are free to disagree.

Well, so India and China have to develop their value chain to live with $100/bbl.... My view of the need for triple digit is simply with regard to prudent development and reservoir management to maximize the availability of the resource for humanity as a whole. What is currently going on is a lot of corner cutting under the name of "cost saving" which each and every has the efect of reducing reserves/ultimate recovery. And that is bad for everyone, not just India and China: Especially Asia needs higher prices as fields get abandoned with 2/3rd of the OOIP still there. The easy oil is over. Everywhere.

[Tom Kirkman + 8,860]

6 minutes ago, Robert Ziegler said:

Well, so India and China have to develop their value chain to live with $100/bbl.... My view of the need for triple digit is simply with regard to prudent development and reservoir management to maximize the availability of the resource for humanity as a whole. What is currently going on is a lot of corner cutting under the name of "cost saving" which each and every has the efect of reducing reserves/ultimate recovery. And that is bad for everyone, not just India and China: Especially Asia needs higher prices as fields get abandoned with 2/3rd of the OOIP still there. The easy oil is over. Everywhere.

Understood.  We actually seem to agree on much of this.  The only difference is in haggling is over the price level.  I see $70-ish oil as a relatively sustainable balance.  You see $100-ish.  

 

[Keven Tan + 85]

8 hours ago, Tom Kirkman said:

India, China, Japan and a host of other oil importing countries would probably beg to differ with you.

In my view, not only is $100 oil (Brent) not sustainable, neither is $80.

Currently, my main reason for hoping for $70 oil next year is an acknowledgement that new O&G exploration and production is lagging, and oil companies need sufficient profits in order to reinvest in new exploration and new projects.

Just my opinion; as always, you are free to disagree.

If Brent downs to $70 as you hope, then WTI will be as low as $60-$63, probably? 

I would love to see it! lol 

 

 

[Tom Kirkman + 8,860]

Just now, Keven Tan said:

If Brent downs to $70 as you hope, then WTI will be as low as $60-$63, probably? 

I would love to see it! lol 

In the Oil Price Challenge thread, my guesstimate for 31st December 2018 is $70 Brent and $65 WTI.