Oil and gas price forecast for 2014

From:  Smart Planet 

By Chris Nelder

Whither the world of energy prices during the next 12 months? Energy analyst Chris Nelder grades his 2013 oil and gas price forecast, and gazes into the crystal ball for his 2014 predictions.

It's the end of the year, and that means it's time to review my oil and gas price forecast for 2013, look into my crystal ball, and foretell prices for 2014.

Reviewing my 2013 forecast

At the end of 2012, I forecast that Brent Crude (the London benchmark price, which serves as a global proxy for oil prices) would average $105 per barrel (bbl) in 2013, and that West Texas Intermediate (WTI), the North American benchmark, would average $90 to 95/bbl. 

In the spring, gas prices shook off 20 straight months of unprofitably low levels and shot over $4 per million British thermal units (MMBtu). Accordingly, I updated my gas call in May to $4.50/MMBtu by the end of the year, and left my oil price calls unchanged. 

With no articles on my publishing schedule until late January, this seems a good time to run the numbers.

As of this writing, with 49 weeks of data available for 2013, Brent has been $108/bbl and WTI has been $98/bbl on a daily averaged basis. Spot natural gas is selling for $4.24 and front-month gas futures now stand at $4.40/MMBtu. Natural gas prices have charged straight up from $3.60/MMBtu in mid-November; a cold winter is forecast; and gas in storage is 3 percent below the five-year average and 7 percent below year-ago levels. It seems quite possible that my $4.50 target will be achieved by the end of the year.

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