I had intended to grade my 2018 energy predictions before now, but one of them wasn’t decided until the last day of the year. But after the stock market closed on December 31st, I was finally able to grade the five energy predictions I made at the beginning of the year.
I was correct on four predictions, and barely missed on the fifth. Here are the details.
1. The U.S. will break its all-time oil production record
In October and November of 1970, monthly U.S. oil production exceeded 10 million barrels per day (BPD) for the first time. In the next 47 years, monthly production never again reached that level. But that record has now fallen.
Funny enough, the record had already been broken when I made this prediction, it just hadn’t been announced yet. Early in 2018, the Energy Information Administration (EIA) announced that the previous monthly record for U.S. crude oil production – 10.044 million BPD set in November 1970 — had been broken. U.S. oil production continued to rise steadily throughout 2018, reaching 11.475 million BPD by September 2018 (the last month for which monthly numbers are available).
Weekly production reached 11.7 million BPD by late December. I also said that I believed the previous annual record, 9.637 million BPD, would fall. We won’t know the final numbers for a couple of months, but weekly production numbers have averaged 10.8 million BPD through mid-December. So the annual record will fall when the final numbers are posted.
2. Oil prices to reach $70/bbl
The price of oil opened the year at $60/bbl, after recovering from the ~$40/bbl level in 2017. In early 2018 there were plenty of people predicting that prices would fall, but I predicted prices would reach $70 a barrel (bbl) in 2018.
There were several reasons I expected oil prices to rise. The threat of sanctions on Iran, global demand that continues to rise, and the deteriorating situation in Venezuela were just three of the reasons I predicted higher oil prices.