2006 Crude Oil Price Forecast

I am projecting the price of crude-oil to between $73 and $99 by the end of 2006, with a narrower target range of $79 to $85. This is based on extrapolation of the movement of the price of oil for 2005 and an expectation that the factors contributing to that change will remain basically the same.

I track the price of NYMEX crude-oil futures using 4-week and 26-week moving averages. The 26-week moving average ended 2005 at $61, roughly a 39% increase for the year. Assuming an increase in this value of between 30% and 40% for 2006, I get a range of $79-85. When we look at the more volatile 4-week average, we see that in 2005 it ranged between 7% below the 26-week average and 17% above this same number. This gives us the wider possible range of $73-99.