Product price prediction – September 2019

Product Price Prediction II – September 2019

by John Wright, OPC Consultant Petroleum Economist 

Like the wider oil industry community, OPC is effected by product price. A regular review and commentary of key data and how future prices may react is a useful tool for OPC subscribers and an interesting interactive challenge of price prediction by the community.  You can read our first prediction published in June 2019.

Steady as she goes! If a little lower than the June projection

Oil forward prices decline from current spot prices (backwardation), but a less marked decline than in June

Gas forward prices rise from current spot price (contango), but again a less marked rise than in June

Future prices are slightly downgraded from the June 2019 data.

Political barometer

A Political barometer and its possible qualitative impact on oil price:

The political barometer indicates more negatives than positives but is fairly benign, which confirms the current slight backward dated market.

OPC Oil Price Forecast

OPC expects the market to become a little more bullish as Trump’s tariff model hurts the US more than China and is dialled down, allowing US/China economies to recover somewhat – which would re-balance the opinion that is currently depressing forward prices.  On the other hand, the economic situation in Europe has worsened slightly.

On balance therefore, OPC predict prices to remain fairly constant, around $60, for the next year, but with some fairly major fluctuations – as have been seen in 2017/18.

Constant prices, around $60, with fluctuations

John Wright is the senior consultant Petroleum Economist for OPC.  He has more than 25 years’ experience in oil and gas, initially within petroleum engineering and then specialising as an Economist within CNR, Amerada Hess and BG Group.  He has worked as an expert petroleum economics consultant for more than 10 years, supporting a wide range of E&P companies and investors with economic modelling, portfolio valuation, fiscal agreement negotiation and decision analysis.

Call:  +44 20 7428 1111


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