LONDON: Oil prices are expected to remain close to current levels, averaging around $60 to $70 per barrel through the end of the decade, according to the annual survey of energy professionals conducted by Reuters.
Forecast prices have changed very little since the last survey a year ago, and are only modestly higher than in the first survey conducted in 2016, when spot prices were much lower than they are today and near the bottom of the cycle.
Long-term price expectations have become anchored around $70 per barrel - with forecasts clustered in a range of $60-$70 for 2018 widening to $60-$80 by 2020.
The results are based on a questionnaire sent to over 7,000 energy market professionals. Responses were received from just over 1,000 between Jan. 9 and Jan. 11.
Brent prices in 2018 are expected to average $65 per barrel, which is only marginally higher than the $60-65 forecast in last year's survey. Brent prices in 2019 are expected to average $65-70, up from about $65 in the 2017 survey.
By the end of the decade, prices are expected to average around $70 in 2020, basically unchanged since the surveys in 2017 and even 2016.
Forecasts for 2018 and even 2019 are tightly clustered, with only 5 percent of respondents expecting prices to average less than $55 per barrel in either year.
Similarly, only 5 percent of respondents think prices will average more than $75 in 2018 or more than $85 in 2019.
Even by 2020, the majority of respondents think prices will average between $60 and $80, with few expecting prices to be below $55 or above $85.
Compared with previous surveys, fewer forecasters expect prices to slump again to very low levels in the $30s and $40s - which perhaps reflects growing confidence in the sustainability of the cyclical recovery.
There has been a lot of commentary about the risk of prices spiking towards the end of the decade because of the dearth of investment in new supply since prices slumped in 2014.
But only 4 percent of respondents expect prices to return to average $100 or more by 2020, the level that prevailed between 2011 and the first half of 2014.
Among survey respondents, 25 percent are involved directly in oil and gas production (exploration, drilling, production, refining, marketing and field services).
Most of the rest are involved in banking and finance (18 percent), research (9 percent), hedge funds (9 percent), professional services (8 percent) and physical commodity trading (8 percent).
The results from respondents involved directly in the oil and gas industry were very similar to those in other sectors.
Oil and gas industry insiders and those outside the industry have identical views about the outlook for prices in 2018.
Insiders are marginally more bullish than outsiders for prices by the end of the decade but the difference amounts only around $3 per barrel and is not really significant.
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