Charles Maxwell Predicts Oil - $75, in 2010, – Likes Suncor (SU) & Cenovus Energy

Weedon & Co., oil analyst Charles Maxwell, was on Pimm Fox’s, Bloomberg Radio Show on Friday. Charles Maxwell thinks that $75 a barrel, will probably be the average price for oil this year for these reasons:

1) The U.S. dollar won’t go down too much this year.

2) While China is growing, North America, South America, Europe and the Arab countries have been hurt by the recession, dampening demand for oil.

3) He doesn’t see high inflation for awhile.

He recommends that investors stay away from natural gas because of the glut caused by the production of shale in the U.S. He advises staying away from refiners because there is too much capacity. Likewise, tanker companies.

Long term, he doesn’t like the large integrated companies like Exxon Mobil (NYSE: XOM) because their production will peak in a few years and then decline. Overseas, they have political problems that will keep their production from rising.

Long term, Maxwell likes the Canadian oil sands producers in the Athabasca Oil Sands. He like Suncor (NYSE: SU) and the recently formed Cenovus Energy,(NYSE: CVE) which was recently spun off from Encana (NYSE: ECA) He likes the dividend at 3%.

Long term, he thinks the Canadian oil sands producers will be able to produce the incremental oil that the world will need when there will be a peak oil scenario unfolding, around 2015.

In the meantime, he sees oil trading between $60 and $80 a barrel this year. Today, oil closed up at $81 a barrel after being down for most of the day.