Has the world seen the last of sub /bbl oil? What is guiding the new crude price?
Do we really know how to forecast or do we rationalize after the fact?
In today’s world of + crude and the recent oil bust still relatively fresh, questions like these abound in the minds of the average consumers, companies that depend on oil for their business, nations across the world and the global intelligentsia. It would not be an egregious mistake if
we rate energy and consequently oil price as one of the top topics in the world today at par with world peace and global warming.

Deloitte Consulting LLP- Washington, DC ; Manas Pattanaik- Deloitte Consulting LLP Houston; Ashutosh Ashish- Deloitte Consulting LLP Houston

Has the world seen the last of sub $30/bbl oil? What is guiding the new crude price?

Do we really know how to forecast or do we rationalize after the fact?

In today’s world of $70+ crude and the recent oil bust still relatively fresh, questions like these abound in the minds of the average consumers, companies that depend on oil for their business, nations across the world and the global intelligentsia. It would not be an egregious mistake if
we rate energy and consequently oil price as one of the top topics in the world today at par with world peace and global warming. While much has been said and continues being contemplated about the future direction of the oil price, this article focuses on the underlying factors that drive oil price. More precisely, we explore the changing global business dynamics of oil or what we call here the oil price “stakeholders” and their impact on the underlying price factors. We investigate how the underlying price factors have behaved traditionally and the departure from their traditional behavior responding to thechanging global business dynamics behavior of the oil price as it shifts from its past equilibrium range to the new paradigm. Historical and current trends.
Before discussing the behavioral changes of the underlying oil price factors, let us explore the changing global oil business dynamics or oil price stakeholders that have spurred these changes. Growing demand of oil. We present the composite effect of this changed behavior of the underlying price factors and how that has prompted the movement towards a new Oil Price Paradigm.
The new Oil Price Paradigm discussed in the article does not predict a certain future price of oil but demonstrates the new ecosystem and equilibrium range in which the
oil price is projected to reside.