Wells Fargo Securities believes 2012 will be very similar to 2011 in that there are plenty of risks affecting prospects for economic growth across the world.

If 2011 was a wild year for energy and commodity prices, our expectation is that 2012 will be no different, as the news coming from Europe and other parts of the world should remain unsettling, said Eugenio Aleman, an economist at Wells Fargo Securities.

Aleman said one of the few exceptions to this environment will likely be that U.S. economic conditions will continue to improve and this should temper some of the volatility brought on by other economies around the world.

He recalled that in early 2011 the world energy markets were shocked by the turmoil in the Middle East and North Africa in what has been called the Arab Spring, adding that the movement produced and will continue to produce, sweeping changes across that region of the world as regime changes continue and other, newer regimes start to consolidate.

However, what will keep the region and thus the energy market on edge is that the future remains highly uncertain; consolidation is not without its problems and the end result is far from simple. Thus, Aleman expects the transition to be very difficult and the end result different from what many originally thought it could be.

With Arab Spring already on pace to change the face of the region, the biggest risk for the petroleum market remains the Iranian situation. This will likely become more and more volatile as Iran gets closer to being able to construct nuclear devices and the United States' foreign policy continues to redirect its efforts away from Iraq and toward Iran, said the economist.

He said the most worrisome scenario is the power void being created by the inability of Europe to solve its sovereign debt crisis and the implications this has for a strong European position in dealing with the Iranian threat.

Thus, Aleman expects 2012 to be a very uncertain year for the energy markets and especially for the petroleum market, which will probably mean that petroleum prices will remain volatile until a more certain scenario develops.

Of course, the continued threat of a full-blown European sovereign debt crisis has the potential to ruin the upward momentum in petroleum prices. However, once this threat passes, Aleman believes petroleum prices will remain high for the foreseeable future.

While today the U.S. economy is recovering, albeit at a snail's pace, the Eurozone is battling one of the worst crises since the creation of the monetary union, said the economist. Many, in fact, are wondering if the union is going to outlast its critics.

Meanwhile, geopolitical factors are also going to make 2012 very similar to 2011, even though the Arab Spring was something of a surprise for the world economy when it started.

However, the problem in what should determine the market for commodities in 2012 is not what we know today, with some certainty, but likely what we do not know. Back in 2010, nobody expected an Arab Spring to hit the Middle East and North Africa, said Aleman.

This means that even if what we know today could shed some light on the future for commodities in 2012, it is likely what we do not know that will determine the fate of commodity prices going forward. The only thing we are sure of is that 2012 is not going to be a boring year as there are plenty of risks stacking up around the world, Aleman added.

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