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Oil forecasts from inexperienced staff should be treated with caution

Your editorial on North Sea oil was a fair one but unfortunately the forecasts made by the Centre for Public Policy for Regions (CPPR) are out there and they will affect the referendum vote ("Oil and viability of our economy", The Herald, December 22).

I have been following oil output and prices for a good few years and seen how wide of the mark so many experts have been when forecasting.

Over the last few weeks the guesses have been wider than usual. I have seen forecasts from the pro-shale voices in the US with extremely low forecasts and very high forecasts from others. However Statoil, Dana and others have put big money behind their forecasters.

The level of their investments would indicate that they think prices will stay up at levels which make these viable.

As someone who spent most of his life producing statistics, modelling and forecasting I know that if you get initial assumptions wrong your forecast will be wrong. Too often in recent years we have seen forecasts produced by very smart but inexperienced staff.

We should take some of them with a pinch of common sense.

Jim McAdam,

The White House,

23 Drumdow Road,

Turnberry.

Contextual targeting label: 
Finance

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