Oil and Gas Price Outlook: Updating Our Near-Term Methodology for Forecasting Prices
In isolation, this will be a valuation tailwind for our coverage, but in most cases it will be modest.
Stock Strategist
Mentioned: Teck Resources Ltd (TECK.B)
, Frontera Energy Corp (FEC)
, Canadian Natural Resources Ltd (CNQ)
, Husky Energy Inc (HSE)
, Imperial Oil Ltd (IMO)
, Suncor Energy Inc (SU)
, AWE Ltd (AWE)
, Beach Energy Ltd (BPT)
, Ampol Ltd (ALD)
, Oil Search Ltd (OSH)
Given the large discrepancy that has emerged between 2017-18 Brent futures prices (currently $40-$47 per barrel) and the Morningstar energy team's outlook for midterm oil industry fundamentals, we are amending our methodology for forecasting near-term oil and gas prices.
Historically, we used strip prices for 36 months (updated regularly) before moving to our midcycle prices, which are set by our long-term marginal cost expectations (unchanged at $70/bbl Brent and $4 per thousand cubic feet Henry Hub).
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Stephen Simko does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.