A few years ago, I wrote about the futility of making year end predictions. My point was that given the non-linear nature of markets, it was completely meaningless to try and predict what might happen with any degree of certainty. As we leave 2018( a year in which Donald Trump sits in the White House, Britain is making plans to throw off the “shackles” of Europe, and trade barriers are being re-erected all over the globe) such prognostications seem even more pointless. So, having said that here we go: our prediction for the oil market in 2019 will be that price will depend on who wins the battle of the geo’s: Geo-politics, Geology and Geography. More specifically, the battle in 2019 will pit the technologically driven U.S. shale production, with its inherent geographic dislocations, against the geo-politically driven OPEC/Large Non-OPEC producers. We suspect that the markets will test the mettle of the shale producers in 2019, particularly given some of the punitive differentials. However, the geo-political hotspots involving the usual suspects of Iran, Venezuela, Syria, and others will undoubtedly provide support for what might be a steeper fall in price. It is our feeling that the steep decline in price during the late fall was originally driven by Iranian waivers but was then exacerbated by dynamic hedging taking place over the 4th quarter. Imbedded in this price decline was an increasing amount of rhetoric about falling global demand despite a lack of any supporting evidence thereof. Prediction: The market tests the U.S. shale cost structure early in the year, but real geo-political concerns combined with a stable demand picture brings prices back into their mid 2018 ranges.