The FT publishes today an interesting article that quotes from Barclays research. Paul Horsnell from Barclays appears to be going for an oil price of around $185 by 2020. And to give some credence to that view, the FT quotes (somewhat selectively) some details of his previous forecasts.
I remember commenting previously on Horsnell in 2005 when oil prices hit $60 - which, as I noted at the time, was beyond the expectations of virtually everyone when oil prices had been below $20 some 5 years earlier (myself included - though I had certainly expected oil prices to get into the $45-50 area when I first invested in the sector with oil prices under $12).
I now find it very difficult to think that oil prices won't get somewhere in the area Horsnell suggests by 2020, especially given the geopolitical upheavals of this year and the continued sway that the environmental lobby holds over policy ...for example in the US (offshore drilling bans, new environmental rules etc), UK (this week's Budget moves were supposedly "Green") and underdeveloped parts of Africa (eg SOCO's problems on Block V) .......all of which has been driven by a combination of pandering to popular opinion (post the BP spill) and blatent fund-raising opportunism by the environmental lobby (see the Block V link above!). And the net effect is that marginal production of oil is being ceased prematurely and that exploration is being deferred, disincentivised or cancelled.
Incidentally, IIRC the late Matt Simmons' estimate (5 years or so ago) for the longer-term oil price was also around $185....though I guess he wouldn't have factored in the potential for regime meltdowns in oil-producing states.
I suspect we are heading into a world that will look radically different in terms of the shape of economic and political power structures - and in terms of economic opportunities for the world's population. And it seems to me that this could be a very messy and protracted transition. Perhaps $185 oil may only be a small part of a much bigger and rather worrying picture?