Oil.

• Author: Williams, Michael D.
• Position: 2006 Alaska Forecast

Twenty-five dollar a barrel oil????? The Alaska Department of Revenue creates an official forecast of Alaska crude oil production and Alaska North Slope (ANS) crude oil prices. The most recent version was released on Dec. 15, 2005. The information in this article is taken from the official forecast contained in that publication (see www.tax.state.ak.us to obtain the complete forecast).

The department forecasts ANS crude oil production at 865,000 barrels per day (b/d) for fiscal year 2006. This represents a 5.6 percent decrease from FY 2005 when crude oil production averaged 917,000 b/d. In addition, the department projects a decline in production over the next decade as volumes fall to 800,000 b/d in 2016-an average annual decline of 0.75 percent per year from FY 2006 to FY 2016. Regarding crude oil prices, the department forecasts ANS crude oil prices on the West Coast at $57.30 per barrel for FY 2006-a 32 percent increase over the FY 2005 level of $43.43/barrel. For FY 2007, the department projects prices will decline to $49.20/barrel and for FY 2008 prices will decline to $40.95/barrel. Beyond 2008, the department forecasts prices of $25.50 per barrel.

(The price of crude oil is set in the international market place. The price takes into account worldwide factors such as the supply of crude oil on all the continents and the demand for crude oil in all the continents. The production in any one field has little...