Of all the things that we can try to forecast, oil prices are among the most difficult. Inside the first year, there is too much speculation clouding reality. Beyond that window there is too much uncertainty about the market fundamentals for any forecast to have much value. But, that doesn’t stop us from trying.

Definition

This forecast is a time series of Alaska North Slope (ANS) oil prices, that will be reported by the Alaska Department of Revenue. The forecast is the average daily prices for an Alaska fiscal year, which runs from July 1st through June 30th. The reported values are the mean value, along with 10% and 90% estimates of how likely it is that actual prices will exceed the given value.

The mean is the number that should be used if you need to reference a point estimate of this forecast. However, the range is also an important part of understanding how much we don’t know about the future.

Short-Term ANS Oil Price Forecast (as of August 15, 2018)

Low Forecast High
July-18 $76.19
August-18 $72.12 $73.58 $75.01
September-18 $67.50 $73.78 $80.10
October-18 $65.27 $73.99 $82.89
November-18 $63.16 $74.20 $85.23
December-18 $61.68 $74.41 $87.34
January-19 $60.17 $74.63 $89.27
February-19 $58.92 $74.85 $90.89
March-19 $57.56 $75.05 $92.69
April-19 $56.47 $75.25 $93.95
May-19 $55.20 $75.45 $95.50
June-19 $54.14 $75.65 $96.78
FY19 $64.16 $74.75 $85.53

Long-Term ANS Oil Price Forecast (As of August 15, 2018)

In the long term, supply and demand drive the price of oil. Therefore, the long-term forecast should not react nearly as much to day-to-day price movements. That is why we use a mean reversion component in the long-term price forecast. While prices may rise or fall, they are pushed back toward the market clearing price over time. If you check this forecast regularly, you will notice bigger changes in the near term with a fairly stable and wide range as you look further out.

FY Low Forecast High
2019 $64.16 $74.75 $85.53
2020 $52.40 $75.10 $98.18
2021 $47.43 $75.39 $103.15
2022 $44.60 $75.62 $106.65
2023 $43.05 $75.81 $108.49
2024 $41.92 $75.97 $110.08
2025 $41.64 $76.10 $110.61
2026 $41.27 $76.20 $111.33
2027 $40.03 $76.29 $112.25
2028 $40.43 $76.36 $111.94
2029 $40.70 $76.41 $112.24