The Energy Information Administration (U.S. Department of Energy) has released a preview version of its Annual Energy Outlook 2008. A highlight:
In the AEO2008 reference case, real world crude oil prices (defined as the price of light, low-sulfur crude oil delivered in Cushing, Oklahoma, in 2006 dollars) decline gradually from current levels to $58 per barrel in 2016 ($70 per barrel in nominal dollars), as expanded investment in exploration and development brings new supplies to the world market. After 2016, real prices begin to rise (Figure 1), as demand continues to grow and higher cost supplies are brought to market. In 2030, the average real price of crude oil is $72 per barrel in 2006 dollars, or about $113 per barrel in nominal dollars.
$58/barrel in 2016 (a 38% decrease from today)? I’ll take the over.
The report cites increased production as a reason for the decrease. But, as Richard Shaw notes, much of the new production that will be coming online has a much higher break-even price. So even under a best-case scenario, it’s hard to imagine that long-term oil prices would drop that far (barring a world-wide depression).
On a related note, here’s an interesting 2005 UK documentary on peak oil. It’s about 50 minutes long; lots of good information.