Oil Prices to Fall Back to $55

The June 22 OPEC meeting did nothing to change analysts' long-term outlook for global oil prices. We still forecast a 2022 crude price of $55 per barrel

Jeffrey Stafford, CFA 27 June, 2018 | 1:56PM

Oil rig commodities natural resources energy brent crude WTI oil price

Though oil prices have pulled back some from highs above $70 per barrel of West Texas Intermediate in May, we expect them to fall further in the long run. We project a 2022 midcycle price of $55 per barrel for WTI, $60 per barrel Brent, which would represent a 20% decline from today. Our forecast also puts us 10% below long-term consensus.

As expected, our cautious stance on oil translates to much of our energy coverage trading above fair value. Still, some pockets of opportunity remain, particularly in the volume-driven midstream space.

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About Author

Jeffrey Stafford, CFA  Jeffrey Stafford, CFA, is an equity analyst for Morningstar, covering agriculture and chemical companies.

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