Included in the economic assumptions from the Congressional Budget Office's latest Budget and Economic Outlook, is this on oil prices:
The price of high-quality oil in the U.S. spot market (the market dealing in oil for immediate delivery) stood at $43 per barrel in December 2004. At the same time, prices in the futures market for oil (for delivery in later months) were somewhat lower--about $40 for delivery in December 2006, for example (see the figure below). That disparity seems to suggest that the futures market expects the spot price of oil to fall...
For convenience, here's that figure.
The CBO's discussion -- it is in Box 2-2 in the report -- has a nice discussion of the accuracy of forecasts derived from the futures market, as well a list of reasons that falling prices are plausible. It is worth reading, but if you do, you may want to check out this article by my colleagues Joe Haubrich, Pat Higgins, and Janet Miller. Here's what they have to say:
The oil futures market... it does not provide any easy way to predict where the price of oil is headed. When the good in question is easily stored, as is oil, the same supply and demand factors that would drive the futures price up would also drive up today’s spot price. Storage costs, interest rates, and convenience yield then account for the difference between spot and futures prices. In particular, futures prices below today’s spot price do not mean that oil prices are expected to decline. Nor is there anything special, or unusual, about such backwardation.
The article provides an explanation of backwardation, and more. I give it a thumbs up.