With apologies to director Peter Weir and actors Mel Gibson and Sigourney Weaver, oil markets in 2004 could well deserve the title above that was attached to a modestly successful cinematic venture about 20 years ago. Our inaugural OPIS Roundtable found a chorus of 16 voices, all in relative agreement that the next 12 months will see a continuation of the volatility that has become a hallmark of 21st century petroleum markets.

Some of the themes are left over from 2003. Various analysts believe the markets may turn based on Iraqi infrastructure, U.S.policy toward the Strategic Petroleum Reserve, OPEC discipline or lack thereof, and the unpredictable regime of the fatigue-clad Hugo Chavez in Venezuela.

But there are new issues which are especially pertinent to the 2004 landscape. China has emerged as a dominant focal point, with some suggesting that more than one billion residents under a nascent capitalist economy are beginning to overshadow traditional global supply and demand economics. There also is renewed worry about the state of Saudi politics, with more than one voice reminding us that possible changes in the regime there could lead to virtual chaos in Western economies.

And the U.S. dollar, once an afterthought in global energy prices, is a front and center issue as northern hemisphere days begin to lengthen, reflecting clear concern that foreign exchange may not be stable, even if oil prices are. If these geopolitical issues are not enough, the U.S. will deal with the introduction of ethanol to new markets, the begin-nings of a major desulfurization in light products, and the uncertainties that are typically attached to domestic politics in an election year.

It all adds up to a year that has the potential to see "prices eclipse the threshold where consumer behavior is actually altered," in the words of OPIS resident analyst Tom Kloza. It may very well represent the "renaissance" that has been predicted for U.S. refiners since the decade began, or it could feature some of the darkest periods for energy consumers since the Iranian Revolu-tion.Or, it just might feature a little of both.

Those roundtable members willing to make projections for crude oil and gasoline generally see a strong first half 2004 performance, although nearly all analysts believe that the peak can't be far off the $36.37 witnessed when February crude futures went off the board last week.

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