In August 2014 the US EIA expected Brent oil at $105 a barrel in 2015. The outcome: $52
Brent oil, $ a barrel, 2015 average
The forecast for 2015 moved with the price: $102 in January 2014, $105 in August 2014, $58 in January 2015. The January forecast of the current year came within 5% of the outcome 4 times in 13.
More
Every month the US Energy Information Administration (EIA) publishes its Short-Term Energy Outlook for this year and the next: the prices of oil, gas and gasoline. Here: the forecast of the annual average price.
Across: when each forecast came out. Blue: the forecast of the 2015 average price in each monthly issue (first a year ahead, then for the current year); orange: the outcome. The shading is the error.
- Forecast for 2015, January 2014
$102
- Forecast for 2015, July 2014
$105
- Forecast for 2015, August 2014
$105
- Forecast for 2015, January 2015
$58
- Forecast for 2015, July 2015
$60
- Forecast for 2015, December 2015
$53
- Outcome: 2015
$52
The price table of each monthly Short-Term Energy Outlook (24 issues with a forecast for 2015); outcome: EIA’s annual average price. The largest misses of a next-year forecast since 2001 (without the pandemic years 2020–2021), one per year, both directions: up to three for oil, one for gas. The January forecast of the current year (2013–2025): above the outcome 6 times, below 7.
The chart shows the forecast for the year moving with the price: it showed a sharp turn of the market once the turn was under way. The other largest misses go both ways: gas for 2023, the forecast 2.4 times above the outcome; oil for 2009, the forecast 2.1 times above the outcome; oil for 2005, the forecast 2.0 times below the outcome.
A question for this picture
If a year-ahead price forecast moves with today’s price, what does it add to it?