Oil tycoon T. Boone Pickens predicts return to $100 a barrel
Oil tycoon T. Boone Pickens predicts return to $100 a barrel
Published: Dec 2, 2014 10:37 p.m. ET
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Pickens: ‘You can’t imagine how many of these cycles I have seen and endured’
By MARK DECAMBRE
Bloomberg
T. Boone Pickens sees oil back at $100 as early as next year.
NEW YORK (MarketWatch) — Prominent oil investor and sometime-renewable-energy booster T. Boone Pickens predicted Tuesday that the plunging oil price would rebound to $100 a barrel in the next 12 to 18 months.
Pickens also said he expects the Organization of the Petroleum Exporting Countries will eventually move to slash oil production, possibly in the first half of 2015.
“They didn’t say they wouldn’t cut, but OPEC will have to cut, and that is what’s going to happen. The Saudis are the ones that make the cut. They can take $70 oil and take it out 10 years — they have the cash reserves that allow them to do that. But they can’t do that to the rest of OPEC,” Pickens said.
The 86-year-old Pickens, who chairs the energy hedge fund BP Capital Management, offered his forecast in an interview on CNBC’s “Mad Money” with Jim Cramer late Tuesday.
Oil price prognostication has become a new parlor game on Wall Street and in shale-oil pockets across the U.S. Pickens, in backing his own call, alluded to his roughly 50-year tenure in the oil industry, saying: “You can’t imagine how many of these cycles I have seen and endured.”
Pickens’s call came as oil swooned from its worst drubbing in years, hitting five-year lows after OPEC decided to keep its production quota unchanged late last week.
London-traded January Brent crude oil LCOF5, +0.38% was off nearly 3% Tuesday at $70.54, while West Texas Intermediate CLF5, +0.76% was down by about the same percentage at $66.88 on the New York Mercantile Exchange.
Nymex crude last traded around $100 dollar a barrel on July 25, when it settled at $102.09, while Brent last closed at $100 on Sept. 5, according to FactSet. Predictions for oil have been all over the map. Some dire forecasters, like oil entrepreneur Murra Edwards, see oil prices hitting a $30-barrel nadir, while others are predicting oil will average around $80 a barrel
Where Pickens’s view differs from many analysts is his call that Saudi Arabia, the producer holding the most sway among the 12-member OPEC bloc, weill be willing to cut oil output significantly. Many have viewed OPEC’s decision to stand pat on its output as an attempt to apply pressure on U.S. shale-oil producers. And as oil prices continue to deflate, shale producers — which tend to use a lot of debt to finance their hydraulic fracturing and oil drilling operations — may be buffeted. Read: These U.S. oil producers have the most to lose.
Any move to reduce output by the Saudi producers, however, would also risk their market share.
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