THEN DROPS TO $66 PER BARREL FOR 2020
The Alaska Department of Revenue released the spring 2019 revenue forecast today. The spring forecast includes the Department’s updated FY19, FY20, and long-term forecasts for oil price, oil production, and state revenue.
Not counting transfers from the Alaska Permanent Fund, the Department forecasts unrestricted revenue of $2.7 billion in FY 2019 and $2.3 billion in FY 2020.
Additionally, the Permanent Fund is expected to transfer $2.7 billion to the general fund in FY 2019 and $2.9 billion to the general fund in FY 2020. These amounts are available both for payment of Permanent Fund Dividends and for general government spending.
Alaska North Slope oil prices are forecast to average $68.90 per barrel for FY 2019 and $66.00 for FY 2020. Based on a review of oil market fundamentals, the Department chose not to revise its view on long term oil price since the fall forecast. Long term, the Department continues to expect oil prices to stabilize in the low 60’s in real (inflation-adjusted) dollars.
The revenue forecast is also based on projected North Slope oil production averaging 511,500 barrels per day in FY 2019 and 529,500 barrels per day in FY 2020.
The fall forecast posted by former Gov. Bill Walker anticipated an average Alaska oil price of $75 per barrel for fiscal year 2020, with prices climbing to average $84 per barrel by 2027.
The current price of Alaska North Slope crude is $68.43.
The production forecast is prepared in collaboration with the Department of Natural Resources and reflects an updated assessment of future production that slightly adjusted production expectations for the next several years. Production is still expected to remain around 500,000 barrels per day over the next decade as new developments offset production declines from existing fields.