While there are some factors that can help predict the oil industry’s future, there are others that just aren’t foreseeable. Our fleet fuel card company decided to see what some people and companies predict for oil this year and beyond:
$70 per Barrel
According to CNBC‘s Terry Tamminen, oil will rise this year and will peak at $70/barrel. He believes that because OPEC nations are struggling with the low price of oil, they’ll soon reduce their output and raise their prices to help prolong their supplies.
Pressure Will Be Limited
The U.S. Energy Information Administration believes that global oil inventory builds will continue through most of this year (but will be especially prominent in the first half), so pressure on oil prices will be limited. The EIA predicts prices will be about $38/barrel for most of 2016.
The Financial Forecast Center is optimistic about the price of oil this year. It predicts that prices will steadily decline and by July, the average price will be $19.2/barrel.
Less Oil Production
In addition to their prediction of $38/barrel, the EIA forecasts oil production to be lower than it was last year. Last year, it averaged an estimated 9.4 million barrels per day, but this year, the estimate is 8.7 million barrels per day and in 2017, 8.5 million barrels per day.
A Non-OPEC Rise
About 60% of the world’s oil production is from countries that are outside of the Organization of the Petroleum Exporting Countries (OPEC), and in its World Oil Outlook, OPEC believes that non-OPEC crude oil will be down this year, but will be on the rise in the next few years.
A Similarity to 2015
Tom Kloza, founder and global head of Oil Price Information Service’s energy analysis data, predicted that oil prices would hit $35/barrel in 2015, and he was right. This year (according to Market Watch) he believes that U.S. shale producers won’t slow down their oil production this year, which means prices could go back up to as much as $55/barrel by the end of 2016.