Modeling the future of oil

Three possible futures for oil prices come from the US Energy Information Administration.  They break down, rather obviously, into low, medium, and high prices:

What goes into these price futures is not so simple:

Factors considered in AEO2012 that affect supply, demand, and prices for petroleum in the long term are:

  • World demand for petroleum and other liquids
  • Organization of the Petroleum Exporting Countries (OPEC) investment and production decisions
  • The economics of non-OPEC petroleum supply
  • The economics of other liquids supply

It’s a useful report, given the huge impact oil prices have on the world.

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