The international oil prices for the next three months, year, or ten years from now are impossible to forecast with any degree of reliability. Those who are forced to forecast prices as part of an economic feasibility analysis for long-term investments in the energy sector are bound to be proven wrong by events. Yet, at least, the forecasts must make analytical sense. This was not the case for the forecasts made in 2004 by DOE-EIA and the International Energy Agency, IEA, in their respective flagship reports "Energy Outlook" and "World Energy Outlook". This led me at the end of 2004 to write an alternative analysis.
Unlike the EIA and IEA at that time, I concluded that we were witnessing a parameter shift in the medium to long-term price of oil on the international market. Yet, like all oil price forecasters, I also got my price forecast wrong: I underestimated how fast and how deep the impact was going to be on the international commodity market of having a giant like China growing at more than 10 percent per year.
Wolfgang Mostert, Dalparken 6, 2820 Gentofte, Denmark
Phone: + 45 396 36131, Mobile: + 45 2216 2999