Forbes Magazine 1/9/2015
Around the world, petroleum industry executives at companies from Chevron to ExxonMobil to BP to Continental Resources are praying for oil prices to “recover,” and quite a number of forecasters are predicting that they will. One news story from last month put the average price predicted for 2015 at $82.50/barrel, which would be about 60% above where they are now.
The first and largest problem for forecasting is bias: people almost always start from their particular beliefs and preferences before analyzing the facts. Few in the industry, or governments that rely on oil revenues, considered the possibility that prices could drop below the $100/barrel level for any length of time.