Future World Oil Prices: Review of Current Forecasts, Identification of Price-Determining Factors, and Delineation of a Quantitative Framework for Analysis

摘要

This study is part of an examination of strategic questions underlying decisions regarding the US' development of new conventional oil and gas reserves and synthetic fuels production. As a baseline, an attempt is made to identify the actual determinants driving foreign oil prices of which production costs are but one element. By examining what foreign suppliers are charging and what latitude they have to change their prices, we should be better able to identify options for dealing with them. Specifically, we need to know what prices OPEC may want to set over time and how low they could allow prices to go without damaging their economies. Also, we need a better understanding of how much domestic oil consumption could be curtailed by substituting gas and a better understanding of the comparative economics of new oil and gas sources. Eventually, we also need a sound basis for strengthening agreements with western hemisphere oil exporters and improving relations with our oil-consuming allies and non-cartel nations in other parts of the world, all in keeping with the President's new program for developing potential economic allies and reducing their dependency on OPEC oil. This report analyzes: (1) Key energy market and non-market forces, including national policies, that will largely determine future world oil prices; (3) recent world oil price forecasts by a number of public-sector and private-sector organizations; and (3) a framework and method of attack, involving energy market equilibrium analysis, for estimating long-term growth rates in world oil prices in relation to alternative energy policies of the oil-consuming and oil-exporting countries. These topics are all facets of the central issue: the prospective interactions between future world oil prices and US energy policies - particularly those policies that can increase long-term domestic energy supplies. (ERA citation 08:023035)