Global Crude Oil Prices
Beginning in this month's Outlook, EIA is providing a forecast of Brent crude oil spot prices (see Brent Crude Oil Spot Price Added to Forecast). After WTI and Brent fell to year-to-date lows of $78 per barrel and $89 per barrel, respectively, on June 21, 2012, oil prices rose following news of a possible Euro-zone agreement regarding debt issues that have clouded the European and global economic outlooks. EIA projects the price of Brent crude oil to average $106 per barrel in 2012 and $98 per barrel in 2013. The WTI price forecast has been lowered by $4 per barrel from last month's Outlook to $93 per barrel in 2012 and by $9 per barrel to $89 per barrel in 2013 (West Texas Intermediate Crude Oil Price Chart).
Energy price forecasts are highly uncertain (Market Prices and Uncertainty Report). WTI futures for October 2012 delivery during the 5-day period ending July 5, 2012 averaged $85 per barrel. Implied volatility averaged 33 percent, establishing the lower and upper limits of the 95-percent confidence interval for the market's expectations of monthly average WTI prices in October 2012 at $64 per barrel and $114 per barrel, respectively. Last year at this time, WTI for October 2011 delivery averaged $98 per barrel and implied volatility averaged 28 percent. The corresponding lower and upper limits of the 95-percent confidence interval were $76 per barrel and $125 per barrel.