Despite the recent runup in oil prices, measures of expectations do not spike.
Figure 1: Price of oil (blue), from NYMEX futures as of 3/10/2021 5pm (red), from WSJ March survey (green +). Source: FRED, ino.com, WSJ March survey.
The Wall Street Journal survey conducted in early March as well as futures indicate prices at the end of 2021 in the mid-fifties. The mean forecasted price for end-2021 has gone up about $6/bbl, as shown in Figure 2.
Note that in general, futures do a so-so job (relative to random walk and simple ARIMA models) in out-of-sample forecasting, as discussed in this post.
Figure 2: Price of oil (blue), from WSJ March survey (green +), from WSJ February survey (pink +). Source: FRED, and WSJ survey.
It’s of interest to look at the dispersion of prices as well as the mean. Figure 3 shows the histogram for oil prices at end-2021 from the February survey, while figure 4 shows the corresponding histogram from March survey.
The mean is $56.4, median 57.4, with maximum $66 and minimum $43 (Price/Ameriprise, and Deviney/ABN Amro, respectively).
Figure 3: Histogram for price forecasts from WSJ February survey. Source: WSJ, author’s calculations.
In the March survey, the mean(median) has risen to $62.3($61), while the maximum has risen to $77, the minimum to $46 (Roman/St. Mary’s, and Romero/NC A&T State, respectively).
Figure 4: Histogram for price forecasts from WSJ March survey. Source: WSJ, author’s calculations.
Dispersion has increased, with the standard deviation rising from 5.9 to 6.4, and the distribution becoming more fat-tailed (leptokurtotic). Despite the increase in spread, no forecast comes close to $100 by end-year; one forecast comes in at $93 by end-2023 (Roman/St. Mary’s).