By Velda Addison, Hart Energy

No one knows for certain where oil prices are headed next, but it’s safe to say that $85 West Texas Intermediate (WTI) is not in the cards for 2015.

So it is perhaps a good thing that Jim “Mattress Mack” McIngvale has pulled an oil price-related promotion that was unveiled back in January. The Houston-area businessman who owns and operates the Gallery Furniture retail chain agreed to give customers who purchased $7,000 or more of furniture or mattresses all of their money back if WTI reached $85/bbl by the end of the year.

At the time, the price was about $50/bbl. So anyone who was paying even a little bit of attention to commodity prices would not have taken him up on the offer.

Signs of the downturn were clearly evident, and as each month passed, it appeared as if the downturn would hang around. Prices dipped to the $40s during the first quarter of the year before climbing into the $60s by June—only to fall again.

The price for a barrel of WTI crude oil was $35.70 just before 2 p.m. (CST) Dec. 16.

Unfortunately, the outlook for 2016 does not appear any better.

Stalled production growth and more spending cuts coupled with overcapacity and weak demand could mean another depressing year for the oil and gas sector, according to a global ratings agency’s 2016 outlook.

Moody’s Investors Service released its outlook Dec. 15, calling the outlook negative for the integrated oil and gas as well as E&P and drilling and oilfield services.

The report was released as commodity prices continued to yo-yo, but still failing to rise high enough to erase the pain of a supply-demand imbalance that has caused companies to slash budgets, seek efficiencies and new technology to drive down costs and lay off employees.

“Low commodities prices and uncertainty about the pace of their recovery will continue to limit exploration and production activity in 2016, leading to spending cuts, stalled production growth and volume declines,” said Steve Wood, managing director for Moody’s oil and gas team. “And these cuts will in turn lead to lower revenue for drilling and oilfield services companies, which will face persistent equipment overcapacity and need to minimize capital expenditures just to operate near break-even cost levels.”

Here are Moody’s oil and gas price assumptions for 2016 and beyond:

The prolonged oversupply dampens prices, Moody’s said, noting the situation is compounded by concerns over Iranian production, large inventories and growth in China. Also impacting commodity prices are Saudi Arabia and Russia’s record-high production levels.

But just like in the past demand could change everything—for the better or worse.

The outlook was not all bad though.

“North American refiners have a structural advantage and will benefit from better profit margins from turning crude oil into refined petroleum products,” added Wood. “And although midstream will face growing headwinds in 2016 as lower E&P spending makes its way downstream, its investment in energy infrastructure will help stabilize the sector.”

Velda Addison can be reached at