Press Esc to close

WorldOil

CONTENT PREVIEW

For full content view: Log in Now!

  • Systematic bias in EIA oil price forecasts: Concerns and consequences


    F. Clemente and T. J. Considine

    Over the past decade, EIA projections differ substantially from actual oil prices. Further, Gately (2001; 2007)1 has suggested that the EIA National Energy Modeling System (NEMS) is “internally inconsistent” and routinely forecasts oil prices which are “far too low.” A review of the data provides strong support for Gately’s criticism. Since 1998, of 45 annual forecasts from the EIA, 42 (93%) have under-predicted the price of oil. To statistically assess the situation, we conducted an error decomposition analysis of EIA projections of oil prices from 1998-2006. Error decomposition is commonly used to evaluate economic forecasting models by identifying three sources of error: random chance, linear bias and model bias. The statistical analysis revealed: 1. The root mean squared error of the one-to-four-year EIA forecast of oil prices averages over 30% and ranges as high as 46%. 2. These forecast errors are not reflective of random chance...

This area of the site is restricted. In order to gain access, please either Log In, or subscribe to World Oil.

Two options are available to you for creating an account.

1. Get a Free Trial Subscription to World Oil Magazine and gain immediate access to select content on World Oil Online.

Start a Free Trial Subscription and gain immediate access to the complete current issue of World Oil Magazine. Plus, you’ll receive 3 upcoming issues of World Oil Magazine in print or digital format.* You also receive access to the Energy Events Calendar, Industry Statistics and WO Wire’s news and industry coverage.

Free Trial


2. Purchase a subscription to World Oil magazine and gain immediate and complete access to World Oil Online. As a Total Access subscriber you will have access to all areas of the site available to registered users and free subscribers as well as having access to such premium content areas as:

  • The Archives section containing over ten years of complete magazine archives,
  • The WO DataHub's engineering tables and directories,
  • The World Oil annual forecasts, including past predictions,
  • Select World Oil technical handbooks,
  • And much, much more!

Subscribe


Physical copies of this content may be available for purchase. Visit the Reprints & Back Issues section.


If you are already a paid subscriber and do not have access, please email CustomerService@worldoil.com.

WO DATA HUB

EngineeringTablesIcon-Large

Engineering Data Tables

World Oil's specialized upstream Engineering Data Tables featuring the Drill Bit Classifier, Tubing Tables and more. Get Total Access today.

WO SUPPLEMENTS

2013 Fracturing Technology

2013 Fracturing Technology

ENERGY EVENTS