Investor Presentaiton
$/barrel (expressed in 2011 dollars)
It's very difficult to predict future oil prices.
Historically, people have frequently predicted we have entered a new era of
permanently higher oil prices. But historically, oil prices have fluctuated widely,
and have been very difficult to predict. In the early 1980s, "real" oil prices
(adjusted for inflation) were at record high levels. Many people assumed oil
prices would stay high. But oil prices fell to very low levels by 1986, leading to a
severe recession in Alaska. The bottom line: Future oil prices are highly
$120
$100
$80
$60
$40
$20
$0
40
uncertain.
Average Annual Price of Crude Oil (adjusted for inflation)
Source: Average annual price, West Texas Intermediate crude oil, from U.S. Energy Information Administration,
www.eia.doe.gov/emeu/international/oilprice.html
Oil prices are driven by both
demand and supply! The
sharp drop in oil prices in
2009 was caused by the
sharp decline in demand due
to a global economic
recession.
Costs of alternative energy
forms, such as natural gas,
coal, and nuclear energy, set
an upper limit on oil prices
over the long-term.
23View entire presentation