According to a recent article in Forbes magazine, oil companies around the world are on high alert and hopeful that energy prices will recover. As a matter of fact Forbes was bold enough to go so far as to say the energy companies are praying the energy prices will recover.
According to Forbes “quite a number of forecasters are predicting that they will. One news story from last month put the average price predicted for 2015 at $82.50/barrel, which would be about 60% above where they are now”.
We all know forecasting has its issues. One of the key issues according to the article is bias. “People almost always start from their particular beliefs and preferences before analyzing the facts. Few in the industry, or governments that rely on oil revenues, considered the possibility that prices could drop below the $100/barrel level for any length of time”.
Lets face it the simple fact is that in every walk of life, humans are bias. They tend to assess things from a personal standpoint. This makes forecasting something like oil prices a challenge. The fact that no one really knows for sure where oil prices are going makes it tough for anyone to rally gauge oil cost which in turn make budgeting, cost allocation, and in the end revenues hard to gauge accurately.
Forbes says it this way I the article: ’we’re all human. An unbiased assessment of possible futures is extremely hard to achieve, as almost no-one likes to hear bad news”. The author goes on to state his case and his prediction which you can read here.
In the end, all of us can guess at the future of oil prices, but is there really anyone who knows for sure? The answer is no. Anyone who is tasked with energy management needs to understand this and make appropriate changes and leave effective and workable plans that will hold up against any twist and turns the oil prices may face. Lets face it, we all know that oil prices are going to move. The key is to build a solid energy management program that takes this into consideration whether the prices of oil goes up or down. Build a solid foundation and a smart effective plan, and make sure to address the issue of oil prices rising again because we all know this without a doubt going to happen.
Read the full article here: The Oil Price Outlook For 2015: Beware Optimism
