The Department Of Energy Just Jacked Up Its Outlook For Oil Prices By $20 Per Barrel

Oil Prices

Photo: EIA

The Department of Energy’s Energy Information Administration has released its Annual Energy Outlook (AEO) for 2012, and the big theme in the report is uncertainty.But they’re pretty sure oil prices are going to go up.

Basically, it depends on the BRICs (Brazil, Russia, India, and China).

In the 2012 AEO, the 2015 oil price forecast has been revised upward by $21.50 to $116.91 per barrel.

This is actually much greater than projections from other energy analyst groups (which is what all those other acronyms in the chart mean).

The EIA bases its case on the following:

  • The Keystone Pipeline, or something that bears a strong resemblance to it, will get built — eliminating the current price discount between WTI (of which there is now an over supply) and Brent.
  • OECD consumption grows 48 million barrels per day in 2035
  • Non-OECD use grows to 61 million barrels per day

But the truth is, they really have no idea where oil prices are heading.  Here’s their upper- and lower-bound ranges for their price projections — a nearly $150 difference:

bounds

Photo: EIA

Again, it will really come down to global macro conditions.
And we don’t need to tell you how foggy the outlook for those are…

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