Since 1985, federal government forecasts on oil prices have missed the mark, on average, from 6 percent to 116 percent.
"I've done 120 short-term energy outlooks and I've probably gotten two of them right," said Mark Rodekohr, a veteran Department of Energy (DOE) economist.
Supposed experts on oil prices are legends in their own minds.
On average, private forecasters have undershot their target by 31 percent each year, according to a recent analysis by Deutsche Bank. In the past five years, the price of a barrel of oil has tripled. The fact is, few experts saw it coming.
"If this market can continue going lower without OPEC disrupting it, it's very possible that by 2010 we could be substantially lower than anyone is imagining," said Peter Beutel, an oil analyst at the consultancy Cameron Hanover. "Four to 8 years from now, we could come down and break $20 a barrel."
The Saudi Ghawar field is running out of oil. The world appears to be on a production plateau while demand rises. We could get to $20 oil if demand collapsed. But short of a depression how could that happen?
|Share |||By Randall Parker at 2007 August 08 11:19 PM Economics Energy|