World oil prices are a considerable source of uncertainty in long-term energy market projections. The Annual Energy Outlook 2011 (AEO2011) includes scenarios based upon three assumed oil price paths that span a broad range of possible future world oil prices, reflecting uncertainties in both the supply and demand sides of the oil market. Expressed in 2009 dollars, the 2035 oil price ranges from $50 per barrel in the Low Oil Price case and $200 per barrel in the High Oil Price case, with a reference case oil price of $125 per barrel in 2035.
The key factors affecting longer-term projections considered in the AEO2011 include:
The term 'liquids' includes not just crude oil and lease condensate, but also conventional liquid products and unconventional liquid products.
In AEO2011, the High Oil Price and Low Oil Price cases have been expanded to incorporate alternative assumptions about liquids supply, economic developments, and liquids demand in addition to prices. The Low Oil Price case assumes that world oil prices fall steadily after 2011 to about $50 per barrel in 2030 and stabilize at that level through 2035. Low prices are, in part, a result of relatively low demand in the nations outside of the Organization for Economic Cooperation and Development (non-OECD) and in part a result of greater OPEC production and more open access by resource rich countries. In this case, despite low prices, liquids demand is 3 million barrels per day lower than in the Reference case in 2035.
The High Oil Price case assumes that world oil prices continue to increase to $200 per barrel in 2035 as a result of relatively high demand for liquids among the non-OECD countries, combined with more constrained supply availability, results in a sharp, continued increase in world oil prices. Despite the higher prices, however, total world liquids consumption grows to 115 million barrels per day in the High Oil Price case, or 4 million barrels per day higher than in the Reference case.