Brent crude is expected to average $80-85 a barrel through the middle of the decade, up from expectations of $70 before the COVID-19 pandemic took hold in 2020.
Expected prices are mostly $10-15 a barrel above where futures were trading at the time the survey was conducted between Jan. 11 and Jan. 14, against a pre-pandemic premium of $10 or less.
The most significant post-pandemic change, however, is the large increase in dispersion of views, with many more respondents forecasting prices far above or far below the average.
Both short-term forecasts for 2022-2023 and longer-term forecasts for 2025-2026 are characterised by much higher standard deviations than over comparable forecasting horizons before the pandemic.
Coronavirus, recession, a record price slump, consolidation in the shale industry and emissions-related concerns about oil and gas investment have combined to make respondents much more uncertain about the price outlook.
In the second year of the forecasting horizon, the standard deviation of responses jumps to $17 a barrel, up from $10-11 in the years before the pandemic.
In the fifth year, the standard deviation jumps to $26, up from $19-20 in the surveys before March 2020.
Most responses are clustered around $70 and $90 a barrel over the next four years, based on the inter-quartile range for responses between 2022 and 2025.
And nearly all respondents think prices will average between $60 and $110 (10th to 90th percentiles) or $55 to $125 (5th to 95th percentiles) in 2025.
But there has been an increase in number of respondents forecasting high prices averaging above $120 a barrel or very high prices averaging above $150 in the next five years.
The increased dispersion points to disagreement about how much of the recent rise in prices is cyclical and likely to be reversed, and how much is structural and could be semi-permanent.
The survey is based on a questionnaire emailed to more than 10,000 energy market professionals and others on the “best in energy” mailing list. There were almost 1,000 responses, similar to previous years.
Among survey respondents, 21% are directly involved in oil and gas production (exploration, drilling, production, refining, distribution, marketing and oilfield services).
Most of the rest work in banking and finance (17%), research (10%), professional services (9%), hedge funds (7%), physical commodity trading (6%), other non-energy corporations (5%) and other energy businesses (4%).
There was no significant difference in the average forecasts or dispersion between respondents directly involved in oil and gas production and those working elsewhere.
Full results of this year’s survey and previous surveys can be downloaded here: https://tmsnrt.rs/3fA6gvz
John Kemp is a Reuters market analyst. The views expressed are his own