Abstract: The present invention includes a method and system for creating a price forecasting tool. The method includes receiving historical data related to a commodity, defining a long-run average price trend based on the received historical data and creating a price forecasting tool based on the long-run average price trend wherein the price forecasting tool is capable of taking into account a market momentum of the commodity in order to generate a plurality of scenario prices of the commodity for a plurality of forecast horizons. By utilizing the method and system in accordance with the present invention, a separate statistical model is developed for each forecast horizon, rather than developing a single period model that is then run through simulations to develop longer term forecast distributions.