North Slope crude runs $15 above Alaska's spring forecast, budget group says

Oil prices are running well above what Alaska expected this year, which could bring the state close to $1 billion in extra revenue if they hold. Oil production, though, is falling short of the forecast.

Alaska North Slope crude has averaged about $90 a barrel since the state's fiscal year began July 1, according to daily tracking by Alaskans for Sustainable Budgets, a group that follows state fiscal policy. The state's spring revenue forecast assumed $75.

If futures prices, what traders are paying now for oil to be delivered later, hold, the group estimates the year will average about $95 a barrel and bring in roughly $970 million more than forecast. The Department of Revenue's own tables show a similar gain at that price. Recent prices have run higher still, with the group's four-week average at about $104 last week.

Production could eat into that. The state's forecast assumes the North Slope will produce 518,500 barrels a day. Department of Revenue daily figures show production averaged about 468,000 barrels a day from July 1 through Sept. 27, roughly 50,000 below the forecast.

The higher prices are mostly a one-year story. For the following fiscal years, futures prices roughly match the state's forecast of about $71 a barrel. In May, the department's chief economist, Dan Stickel, told the Senate Finance Committee the state expected prices around $75 for this year, falling "to around $70 per barrel in real terms over the long term."

Oil revenue flows into the state's unrestricted general fund, the money lawmakers divide between state services and the Permanent Fund dividend.