The US Energy Information Administration has adopted a new methodology to show high and low ranges in forecasts of oil and natural gas prices, as revealed in the October issue of its Short Term Energy Outlook (STEO).Rather than continuing the use of variables such as inventories, gross domestic product, weather, OPEC's spare production capacity, and non-OPEC output, EIA now derives confidence intervals around expected futures prices using the "implied volatilities" of benchmark oil and gas options markets on NYMEX."The EIA believes that this methodology represents a market-cleared estimate of risks, i.e., a buyer and seller have agreed on the value of an option," said ...