At a recent summit of experienced persons in Russia that illustrates the wide range in predictions even just for local supplied crude the Russian Ministry of Energy, or Minenergo, the "official" government estimate has oil prices low - at about $80 a barrel in 2013.
However, there were other assessments put in front. The Ministry of Finance (MinFin) set up what can only be described as a economic recession approach. This calculation puts oil prices at $62-$65 a barrel.
Then there is the Ministry of Economic Development (MED). MED considered both domestic and external trade considerations. The estimate coming from this ministry was lower than that of Minenergo, but at $75 a barrel was higher than that of MinFin.
Against this foundation of contrastive forecasts made by conflicting Russian ministries, estimates from the outside including many are also varied but many are tending to the upside.
Granted, all of the non-Russian suggestions cite the three unknowns limiting the cost of crude elsewhere: the fiscal cliff, the Eurozone debt crisis, and the expected levels of productivity and demand coming from China.
A strong consensus did emerge from North American and European experts it will rise
The overwhelming view is that oil prices will be moving more lofty next year, although the continuing volatility will guarantee that this is hardly going to be a straight line move.
Even still, there will be a number of arguments that will push Brent and WTI prices as much as 20% higher next year-particularly in the first quarter.
2013 Oil Price Forecast: Oil Prices Are Set to Rise
On the European scene, The expectations found in Frankfurt and Warsaw a few weeks ago was more pronounced in Moscow among the Europeans there.
Nobody believes the weakness in the continental economy will be disappearing anytime soon. But the stark anxiety of a collapse in the Eurozone, so much a staple of the talking heads on media throughout much of 2012, is simply absent as we move into the new year.
As for China, we must agreed that this has been consistent and is not causing the massive fluctuations predicted.
The Chinese economy has "cooled" to an annual rise in excess of 7%. The growing demand level is still there and so is the enticement level expected from a quickly increasing Chinese middle class.
These three elements, therefore, are converging in a way to give a result of higher crude prices. All of them are on the demand side of the equation. As each improves, so also will the projections for oil and oil product volume.
Source Fundamentals Will Drive Oil Prices Upward
On the source side, we continue to witness rising costs in both conventional and alternative crude production.
This development largely results from the smaller fields, low quality quality crude, and accelerating infrastructure expenses associated with drilling. Together with these are the ever-present geopolitical struggles in the Persian Gulf, Syria and North Africa.
These considerations translate into higher crude prices .
Should the Iranian situation deteriorate, or the standoff between Iraqi central forces and Kurdish provisional militia , the situation in the Persian Gulf alone would add a risk premium to both benchmarks as well.
Most Indicators for the coming year are pointing to a rise with inherent fluctuations but consumers tend only to experience the rises not any short term decreases