Posted in: Commentary,
by Patrick DeHaan on May 21, 2010 01:35 PM
Since this blog deals with a lot of forecasting and prediction, its always fun to go back in time and see how accurate those forecasts and predictions were. For today, we'll dig up the results of a poll that you may have taken in 2008, asking you about how high you thought oil prices would go.
In April of 2008, the question we asked you was "How high will the price of a barrel of oil go this year?" The results, as of all of our polls, are very interesting. For this one, about one in four, or ~26% got the answer right when they voted for "More than $140".
The results of that poll are below:
$120 was voted by 10% of respondents
$125 was voted by 15% of respondents
$130 was voted by 17% of respondents
$135 was voted by 7% of respondents
$140 was voted by 9% of respondents
"More than $140" was voted by 26% of respondents
"It's already there and won't go higher" was voted by 4% of respondents
7% of people had no opinion
The price of oil at the time of the poll was near $111 per barrel, and we had a total of 30,009 individuals give us their prediction via this poll. Were you one of the people that got it right? Were you off just a bit?
Looking through many of the comments in the discussion on that poll, some people seemed certain that oil would hit over $200/bbl (aren't you glad it didn't?)
Many ask how oil prices got so out of control in 2008. Some of the reason can be traced back to virtually no spare capacity, the highest refinery utilization (plants were running full tilt and couldn't keep up), a strong economy (people were still demanding gasoline at near record levels), and OPEC having little ability to pump more.
Since 2008, the economy has tanked, demand has dropped, spare capacity has increased, inventories around the world have increased. It would take another perfect storm to see prices like that again, but there have been many improvements since 2008. OPEC now has much more spare capacity, refineries have upgraded and expanded their size, and inventories are well above average.
Do you think we've already seen oil prices hit their peak near $87 earlier this month for this year?