Oil Price Forecast

Q.- How can one prove that the evolution of economic variables is predetermined and follows general principles of classical mechanics?

A. - Just accurately predict the evolution. Scientific disciplines have to have predictive power.

I've found a Goldman-Sachs' forecast cited by Bloomberg on June 4. It predicts same level by the end of 2009, as we reported in March.

Now, we think that the rise is much faster and this level will be reached by the end of summer or in early fall.

Goldman also predicts (was our prediction a blueprint) that this level will be broken and crude will be rising in 2010. We have changed this prediction and awaiting a strong and fast dynamic rebound from ~$100 to the level of $50 in 2010. The price should fluctuate around the downward trend (see figure) from $80 in 2010 to $45-$50 in 2015.

Figure 1. Prediction of the evolution of the price index for motor fuel (read oil) relative to the core CPI. Black line - actual measurements, black line with red circles - the prediction from March 2009 to December 2009. Solid red line - new trend of the difference of the core CPI and the index for motor fuel.

Oil price will break the level of $80 to $90 and will reach the level above $100 by the end of 2009. Then oil price will be gradually declining to ~$50 in 2015.