$60.00 A Barrel (USD)
Thread Starter
Join Date: Mar 2004
Location: Somewhere Over America
Posts: 192
Likes: 0
Received 0 Likes
on
0 Posts
$60.00 A Barrel (USD)
Iconic oilman says prices will stay high
11:22 PM CDT on Monday, September 27, 2004
By: SUDEEP REDDY / The Dallas Morning News
In May, as oil prices barreled past $40, Boone Pickens offered a "low-risk prediction." Crude oil would hit $50 a barrel before it hit $30 again.
Now, as oil hovers near $50, the legendary Dallas oilman has another forecast: Look for $60 before $40. He calls it a riskier prediction, but one supported by market fundamentals.
"All projections are that you're going to have a demand for 84 million barrels a day by the first of the year, and you're producing 82 million now," Mr. Pickens said in an interview Monday.
"That doesn't fit. I just think it's going to get tighter."
Mr. Pickens' bets that prices would rise have translated into strong returns at his Dallas-based firm, BP Capital, which manages more than $1 billion in investments.
His energy equity fund is up 40 percent for the year, to $400 million. A commodity hedge fund has more than tripled to $552 million, with almost $101 million in gains this month alone.
"You're short of light, sweet crude worldwide, and you're not going to get loose from that situation," said Mr. Pickens, 76, who rose to fame in the 1980s through corporate takeover attempts.
"As far as I'm concerned, it's going to be short for the foreseeable future unless you have an economic downturn worldwide."
China, he notes, isn't having a problem absorbing expensive crude to feed its hot economy.
And without new supplies available, the only way out is to let higher prices balance out the market.
"With price, you'll kill demand," he said. "That's the only solution I see for it. There's not any short-term fix."
Mr. Pickens said he expects the market to continue behaving in a similar pattern to the last month, when prices dropped from $49 a barrel to $42 – and then turned around to shoot up again.
"I think you'll see the market continue to do that," he said. "But continually it will trend up until you finally reach a level that you kill demand.
"How far down does it go? I don't know. It'll never go back to $35. But there's a lot of room between $50 and $35."
E-mail [email protected]
=============
For those of you on the other side of the world who drink warm beer etc and don't know of T. Boone Pickens here are two links about the man. He just might be right!
http://www.famoustexans.com/boonepickens.htm
http://www.tsha.utexas.edu/handbook/...w/MM/dom4.html
11:22 PM CDT on Monday, September 27, 2004
By: SUDEEP REDDY / The Dallas Morning News
In May, as oil prices barreled past $40, Boone Pickens offered a "low-risk prediction." Crude oil would hit $50 a barrel before it hit $30 again.
Now, as oil hovers near $50, the legendary Dallas oilman has another forecast: Look for $60 before $40. He calls it a riskier prediction, but one supported by market fundamentals.
"All projections are that you're going to have a demand for 84 million barrels a day by the first of the year, and you're producing 82 million now," Mr. Pickens said in an interview Monday.
"That doesn't fit. I just think it's going to get tighter."
Mr. Pickens' bets that prices would rise have translated into strong returns at his Dallas-based firm, BP Capital, which manages more than $1 billion in investments.
His energy equity fund is up 40 percent for the year, to $400 million. A commodity hedge fund has more than tripled to $552 million, with almost $101 million in gains this month alone.
"You're short of light, sweet crude worldwide, and you're not going to get loose from that situation," said Mr. Pickens, 76, who rose to fame in the 1980s through corporate takeover attempts.
"As far as I'm concerned, it's going to be short for the foreseeable future unless you have an economic downturn worldwide."
China, he notes, isn't having a problem absorbing expensive crude to feed its hot economy.
And without new supplies available, the only way out is to let higher prices balance out the market.
"With price, you'll kill demand," he said. "That's the only solution I see for it. There's not any short-term fix."
Mr. Pickens said he expects the market to continue behaving in a similar pattern to the last month, when prices dropped from $49 a barrel to $42 – and then turned around to shoot up again.
"I think you'll see the market continue to do that," he said. "But continually it will trend up until you finally reach a level that you kill demand.
"How far down does it go? I don't know. It'll never go back to $35. But there's a lot of room between $50 and $35."
E-mail [email protected]
=============
For those of you on the other side of the world who drink warm beer etc and don't know of T. Boone Pickens here are two links about the man. He just might be right!
http://www.famoustexans.com/boonepickens.htm
http://www.tsha.utexas.edu/handbook/...w/MM/dom4.html
