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The AAPG/Datapages Combined Publications Database
Houston Geological Society Bulletin
Abstract
Abstract: 
Predicting
Future Product Prices
Predicting Future Product PricesBy
LaRoche Petroleum
Consultants
The history of the oil industry has repeated periods of both
low and high commodity prices and
boom or bust cycles. The actual price
received for the product becomes the
most critical factor in profitability once
the hydrocarbon has been found.
Unfortunately it is the least understood
although the most non-technical factor.
Most experts attempt to use reserves or
perceived lack of reserves to estimate
future product prices. The author
believes this is incorrect. Price is determined
partially by supply and demand and indirectly by reserves
but, most importantly, by deliverability to the market. The
author believes history can be a useful guideline in predicting
future price trends and periods of boom or bust. Understanding
these historical trends and creating company models of price
prediction is as critical to making correct business decisions as
any reservoir
model or probability methodology.
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