Oil Price Forecast by the Big Banks

Enigma in Oil Price Forecasting

Looking at the history of oil price (with three-year increments), one must admit (at least I will) to himself that there’s just no way to ‘forecast’ where the oil price is going. See the informative picture below.

BP, Federal Reserve Bank of St. Louis

The History of Oil Price. Source: BP, Federal Reserve Bank of St. Louis

For the past 154 years, Brent Crude oil price had reached >$100/barrel (USD) price at least four times.

Looking at the duration between the four, let’s decipher exactly how many years it took to the oil price reach those four episodes
1st: 1862-1865

2nd: 1978-1980

3rd: Mid-2000’s

4th: 2011-2014

I bet that those people in 1930-1960’s did not expect that oil price would reach near $40’s because during those decades, oil price had been just hovering the $15-25 per barrel range.

Anyhow, this is the oil price projections for the next year (2016) by the big banks. Forecast per quarter even.

Oil Price Forecast. Source: The Wall Street Journal

Oil Price Forecast. Source: The Wall Street Journal

Meanwhile,

Brent Crude (ICE) price as of 11/11/2015. Source: Bloomberg

Brent Crude (ICE) price as of 11/11/2015. Source: Bloomberg

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.” Warren Buffett

If you are interested in this similar approach to investing and would seek updates, I wish to invite you to this Facebook group SEEKING VALUE (https://www.facebook.com/groups/SeekingValue/?ref=bookmarks)

Happy investing.

Mark Y.

Reference

Bloomberg

British Petroleum (BP)

Federal Reserve Bank of St. Louis

The Wall Street Journal

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