2011 Energy & Commodity Trends

Standard & Poor’s Equity Research has issued some of its key trends for 2011 in energy and materials which calls  for “largely positive signs for both the Energy and Materials sectors” to continue in 2011.

The continued trend of crude oil outperforming natural gas is one to stay.  In materials, S&P sees the rise in gold continuing with a faster than expected recovery in building products and gains by petrochemical players.  The factor that the materials sector has to watch is the potential impact of China on base metals.

We have several sector picks on our own from last week and this week for the year.  The 24/7 Wall Street picks by sector are as follows:

• The Best Big Oil Pick for 2011
• The Best Water Pick for 2011
• The Best Natural Gas Pick for 2011
• The Best Oil Services Pick for 2011
• Solar Outlook for 2011
• Looking for the Best Gold Stock in 2011, as gold flops.

More predictions from S&P:

• On Gold: “we look for gold to finish 2011 at the $1,600 level”
• On Drilling: “a Gulf rig exodus”
• On M&A: “more M&A in the oil patch… We see the integrateds increasing production of natural gas by 10% in 2011”
• On MLPs: “Energy MLPs will likely raise dividends”
• On Emerging Markets: “China concerns will weigh on base metals”
• On Building & Housing Impact: “Demand for building products will improve in 2011… on a faster than expected housing recovery.”
• On Petrochemicals Manufacturers: “Petrochemical players are in a sweet spot.”

Making predictions is hard enough.  As it turns out in most cases, the goal is to get as many trends right as possible.

JON C. OGG