So I told my forecasting students I would post what I taught them today. I project monthly ND oil prices forward to the end of 2016. The following graph is the result of this process.
I estimated the relationship between the North Dakota oil prices and WTI crude prices and then used that relationship to adjust WTI crude price projections.
The good news is the model predicts ND oil prices rise, and be back above $70 per barrel early next year. From a revenue perspective and employment/activity in the Bakken region this is likely a good outcome.
Of course there are always caveats with this type of statistical modeling. The relationship between prices could change, or major external factors could make the forecast less accurate. In addition, we need to wait and see all the various factors in ND that might change that would impact this forecast.
I am forecasting alongside the students on their final project, firmly believing that if they compete with me they will perform better. This is actually only an input into the forecast for employment in North Dakota, so maybe we will let you know how that forecast ends up.