Following on from yesterday’s post marking his 2009 views to market, Macro Man is pleased to unveil the first half of his non-predictions for 2010. Regular readers will by now be familiar with the annual ritual, wherein he differs from the crowd by offering a set of “non-predicitions”, identifying ten things that he feels won’t happen. And so, with no further ado, on with the show:
1. Oil (defined as second WTI future) will NOT rise as much as it did in 2009.
CL2 rallied $31.42 last year, the second-biggest dollar rise ever, and the second-largest percentage gain of at least the past two decades. This reflected a couple of factors that are unlikely to be repeated: an artificially low starting price last year, courtesy of the late-2008 liquidity-driven puke fest, and a massive shift in the delta of economic expectations over the course of the year (from staring into the abyss in January to celebrating the BRICs and contemplating positive payrolls by December.) Put another way, oil prices closed 2009 $31.42 higher than in 2008…despite the fact that Cushing inventories were actually slightly higher. A repeat performance in 2010 therefore seems highly unlikely.
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