Oil and petrol prices in the CNB forecast
Starting with this forecast, the CNB's forecasting system uses the market outlook for the Brent crude oil price, which thus replaces the formerly used Ural crude oil price derived from the Consensus Forecasts (CF) survey. In addition, the forecasting system as from April also uses fuel prices taken from swap contracts on exchanges in north-western Europe (the ARA - Amsterdam-Rotterdam-Antwerp - exchanges).
Under the new scheme, oil and petrol prices are derived from quotations of futures contracts determined as of the Consensus Forecasts (CF) survey date in order to maintain consistency with the other indicators of external developments. Whereas the CF forecast is only available for the three-month and one-year horizons (meaning that developments at other horizons have to be calculated), quotations of futures contracts are available several years ahead at monthly frequency. The expected future development of oil and petrol prices calculated on the basis of such quotations is thus better defined. Moreover, a CNB analysis has revealed that futures contracts have since 2004 predicted future WTI oil prices (the only oil price indicator contained in CF) considerably better than the analysts' estimates in the CF survey, especially at the longer horizon - see Chart 1 (Box).
The results of simulated forecasts for the index of import prices of energy-producing materials based on prices of various types of oil have proved that Brent crude oil has the highest explanatory power. Likewise, oil prices on the exchanges in north-western Europe (ARA) are the best available indicator for estimating retail fuel prices at petrol stations in the Czech Republic.