Dundee Securities' Energy Price Predictions and Top Energy Stock Picks

by: FP Trading Desk

Dundee Securities Corp. has new energy price predictions, joining the a slew of other brokerage houses who have recently revamped their math. If you own oil and gas companies, you’ll like it. If you own a Hummer and plan on doing a cross-country road trip this summer, it is bad news.

A barrel of oil will cost an average of $75 in 2010, Dundee’s analysts predict. That is up 15% from their previous guesstimate of $65. In 2009, a barrel will trade hands at an average of $60, compared to its original prediction of $50.

Why the change?

Three reasons, the analysts wrote in a research note this week:

1) An increase in US inflation expectations (tends to drive crude prices higher as investors seek an inflation hedge), 2) weakness in the US dollar, and 3) an improvement in the market’s perception of how quickly we can come out of this global downturn.

Dundee’s top picks?

Talisman Energy Inc. (NYSE:TLM), Gran Tierra Energy Inc. (NYSEMKT:GTE) are the champs among the seniors, oil sands and internationals. Among trusts, Dundee’s top oil pick is Crescent Point Energy Trust (CPGCF.PK), a perennial favourite among analysts. Its top gas trust is Daylight Resources Trust Ltd. (OTC:DAYYF) In the junior and intermediate category, blue ribbons go to Angle Energy Inc., Breaker Energy Inc. (OTC:BKRYF), and Fairborne Energy Trust Ltd. (OTCPK:FAIRF).