Oil Price

Q47: What will the WTI price of Crude Oil be at the end of 2015 (in USD/bbl)?
Below $30: 6%
Between $30 and $50: 27%
Between $50 and $70: 28%
Between $70 and $90: 19%
Above $90: 20%
(The price at the end of the day on December 31, 2015 on the Bloomberg site will be used, for the  contract closest to expiry at that time)

Oil prices have fallen considerably in the past year, due to increasing production from US shale fields, the OPEC decision not to cut production, and slowing demand.  The current price is approximately $52.50, and futures markets suggest a price of $61 or so by the end of the year (or a fair increase).  The current annual volatility is approximately 60%, based on the US EIA Short-Term Energy Outlook.  I use a lower annual volatility of 50%, because I think oil prices will become less volatile over the year.  Based on the data above, and a log normal distribution of prices (see details here), I derived the numbers above.

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