Forecasts for 2010

2009 was a year of extremes, following a truly black swan of a year in 2008. So what of the coming twelve months. For what its worth, here are a few forecasts.

1. Crude oil prices will not rise above $100 per barrel, unless there is a war involving Iran. There is too much spare capacity to be used should prices rise.
2. Refining margins will remain weak, with a small improvement in diesel cracks and a weakening of fuel oil.
3. At least 1 million bpd of refinery capacity will be closed.
4. Heavy crude differentials will be a little better.
5. A least one significant independent refining company will go belly up.
6. The total value of mergers and acquistions in the sector will be well above 2009, with at least on mega deal involving an IOC.
7. Despite weak natural gas prices, nearly all the major investment announcements will be gas related.
8. Gas prices will remain weak.
9. Someone will make a significant breakthrough in next generation biofuels. The impact will not be felt for a few years however.

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