In effect, when there is consensus about finite resources inexorably driving prices upwards, it becomes difficult for an individual to produce a differing view and all but impossible for a large organization to do so. Prices forecasts are too high, the error is in the trend Oil price forecasters have consistently been not just too high, but unable to even foresee the trend in prices. Although demand forecasting has hardly been perfect, it appears to have primarily suffered from an inability to predict prices and economic growth rates. However, most analysts seem to have been too conservative in their beliefs about the potential price response of demand. Very substantial improvements in energy efficiency have taken place, far beyond what most experts, even the most ardent conservationist, anticipated.
Oil turns out to be very much like other commodities.
One of the most glaring errors in petroleum forecasting has been the post-1980 need to revise supply upward while lowering price projections. The fact that lower price expectations have resulted in higher demand expectations is logical and consistent with basic economic theory. But lower prices and higher production are not normally consistent with basic economic theory, and are a strong indication that the underlying premises are incorrect. Malthusian Bias One of the primary problems which has permeated oil market forecasting for the past two decades has been the tendency towards a Malthusian bias. It might be posited that this reflects the natural tendencies of environmentalists advocating conservation, oil companies or OPEC requesting special treatment, but the bias has seemed to permeate all forecasts for nearly a decade and a half.