The folks at Houston energy investment/research firm Tudor Pickering & Co. surveyed readers of their daily e-mail newsletter about their take on oil prices, and the consensus — not so surprising — is for a bullish outlook.
This is hardly a scientific survey but it might be worth looking at in The Wisdom of Crowds vein of thinking.
| Iranian oil refinery. AP Photo.
A summary of the results:
• Expected single day high price: $106/bbl.
• Expected low price in 2008: $71/bbl.
• Attack on Iran: Only 4 percent of respondents think an attack on Iran by the U.S. is very likely and 69 percent think an attack is somewhat unlikely/unlikely.
• OPEC excess capacity: Just 17 percent of respondents who work for Wall Street investment firms think OPEC currently has more than 3 mmbpd of excess capacity. None of the “industry types” (oil companies, etc.) think there is 3 mmbpd of excess capacity.
• The average NYMEX oil price predicted for the next several years is approximately $85/bbl.
• Only 4% of respondents thought oil prices would average below $50/bbl in 2010 and beyond.
• Half of the respondents think crude oil has a 10% to 30% probability of averaging more than $100/bbl in 2008
• 67% think crude oil has less than a 10% probability of averaging less than $60/bbl.
Interestingly, of the bears on crude (those expecting it to go down), nearly half give less then 10 percent probability that crude oil averages less than $60/bbl in 2008. So the bears have a real limit.
Team Tudor Pickering. Chronicle photo.
The surveyed masses also think NYMEX natural gas prices will stay high in the next several years, in the high $7’s increasing to low $8’s. They expect more supply to come on line next year, including about 1 billion cubic feet per day of new domestic supply, liquefied natural gas import growth of about 0.5bcf/day, but Canadian import decline of about 0.5bcf/day.
Who made these predictions? The 190 responses were from people who deal with energy both from the Wall Street/investment bank side as well as from within energy companies themselves. As Tudor Pickering put it in their summary:
100 of the respondents were Wall Street types, with roughly 2/3 energy specialists and 1/3 generalists. Two-thirds of the Wall Street respondents work at firms with more than $1.5 billion under management and nearly half were at firms managing more than $5 billion. Investment strategy was evenly balanced primarily between long only and long/short.