This has been quite a year for the energy sector, not only producing states in the Rocky Mountain region, but for the United States as a whole. As we start 2019, let’s first take a look back on 2018 – a year full of relative price stability leading toward an optimistic outlook overall for domestic energy production.
2018 Oil Prices
According to Bloomberg Energy charts, WTI Crude has hovered in the $50 to $75 per barrel region throughout 2018.
Do not get me wrong, a $25 per barrel swing in a matter of a month and a half (WTI Crude went from approximately $76 per barrel in early October, 2018 to $50 per barrel right before Thanksgiving) is not a minor price difference – it still has significant impacts. However, for most of 2018, WTI Crude prices stayed above $65 per barrel.
Prices were relatively stable in 2018 – the impact of that relative stability is substantially different than the $50 per barrel decrease that occurred in 2014 when oil prices slid from $107 per barrel in June, 2014 to approximately $56 per barrel in a matter of only 6 months. The impact of the downward pricing trend was major in 2014.
The bottom line is that when we look at the 5-year pricing chart from Bloomberg Energy, WTI Crude for 2018 was on an upward trend that was very stable until prices dropped in October.
The trend is similar for Brent Crude during 2018 – prices were largely on a stable, upward path until October of 2018 when Brent Crude dipped from $86 per barrel to just over $58 per barrel right before Thanksgiving.
Oil prices for 2018 were relatively stable – knock on wood.
One cannot discuss oil prices without also discussing The Organization of the Petroleum Exporting Countries (“OPEC”). In short, OPEC is made up of 15 member countries whose collective goal is stability – to that end, they aim to regulate global oil supply and prices. Specifically, OPEC’s mission is as follows:
“to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”
In recent years, many have questioned OPEC’s power over oil markets and ability to control price stability. As recently as June of 2018, The Wall Street Journal published an article entitled, Is OPEC Losing Its Grip on Oil Prices?, which questioned whether OPEC had any real influence on oil prices.
2. Where We Have Been & Where We Are Going
The U.S. Energy Information Administration (“EIA”) is THE place to discover data, statistics, projections and analysis of domestic energy matters. Each year, the EIA releases its Annual Energy Outlook, which “provides long-term energy projections for the United States.” Keep your eye on the EIA website for more information on where we are going – and stay tuned for more analysis on EIA projections.