Oil prices headed up or down? Experts divided

Oil prices headed up or down? Experts dividedChris Bruce

The reason fuel prices fluctuate wildly is not easy to understand, sometimes even by experts. You might expect analysts to look at the same data and come up with at least similar forecasts going forward. Well, two authorities weighing in with The Wall Street Journal have vastly different expectations.

The oil market largely focuses on two types of crude: West Texas Intermediate and Brent. According to Bloomberg, the prices as of this writing were $60.90 and $67.97 a barrel, respectively. However, one of the WSJ's experts predicts prices to fall to the $45-$50 range by the end of the year, and the other forecasts $72-$80.

So how can two people arrive at such vastly different ideas of forthcoming values? That future turns on how the world reacts to the currently high stockpile of crude. Assuming the inventory stays steady or grows, prices are expected to fall. Conversely, a low cost per-barrel creates less demand to drill new wells, and this comes as the summer drives up desire for fuel, which might force prices to increase.

In the nearer term, price jumps at the gas pump during this summer are reportedly unlikely. The current national average from the US Energy Information Administration is $2.66. However, the agency expects things to settle around $2.45 a gallon from April through September. That works out to be about a dollar less than last year and the cheapest warm-weather prices in the US since 2009.

Things don't look quite so rosy five or 10 years from now, though. Both experts think crude prices might grow in that time, possibly with spikes up to around $100 a barrel.

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