This Week In Petroleum – January 13, 2016
Crude oil prices will remain relatively low through 2016 and 2017
The Short-Term Energy Outlook (STEO) released on January 12 forecasts that Brent crude oil prices will average $40 per barrel (b) in 2016 and $50/b in 2017. This is the first STEO to include forecasts for 2017. Forecast West Texas Intermediate (WTI) crude oil prices average $2/b lower than Brent in 2016 and $3/b lower in 2017. However, the current values of futures and options contracts continue to suggest high uncertainty in the price outlook (Figure 1). For example, EIA's forecast for the average WTI price in April 2016 of $37/b should be considered in the context of recent contract values for April 2016 delivery (Market Prices and Uncertainty Report), suggesting that the market expects WTI prices to range from $25/b to $56/b (at the 95% confidence interval).
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