Pickens Predicting $80 Oil: He Says Crude Will Hit Mark By Next Year While Natural Gas Falls
By Elizabeth Souder, The Dallas Morning News
Jun. 13–Boone Pickens, the legendary Dallas oil and gas investor who seems to peer at markets through a crystal ball, issued a new prediction Monday: The price of a barrel of oil will rise to $80 by the first of next year.
Natural gas won’t do as well, Mr. Pickens said in a speech Monday at the annual meeting of the Oklahoma Independent Petroleum Association, which was held in Irving.
Natural gas probably will drop to around $5 per million British thermal units in the next month or two before turning around. He said he’s not sure how long natural gas prices will remain depressed.
“I don’t think I’ll ever see the price of oil below $60,” said Mr. Pickens, who is 78. But for now, “natural gas is going to struggle a bit,” he said.
Crude oil futures closed at $70.36 a barrel on Monday, down 1.8 percent.
Natural gas futures rose to $6.22 per million Btu, up 0.8 percent.
The Oklahoma native has been largely accurate during the past couple of years. In November, he said oil would drop to $50 a barrel, then return to $60 as demand picked up. The commodity dropped to almost $56 in the autumn before rising again.
And before that, oil prices hit $70, just as Mr. Pickens forecast.
“In the past two years, Boone’s predictions on oil and gas have been uncanny,” said Jeramy Rich, the president of the Oklahoma association, when he introduced Mr. Pickens.
Mr. Pickens, who manages more than $2 billion in investments at Dallas-based BP Capital, said he thinks oil and gasoline prices will continue to rise until they become so expensive that people stop using so much.
That’s because humans have already used most of the oil in the world that’s easy to produce, he said. Drawing oil from the ground is becoming more difficult and more expensive. He acknowledged that some big oil executives disagree with him on that point.
Natural gas prices will probably remain low this year, he said, because last year’s mild winter left storage facilities full. But natural gas prices will eventually recover, he said.
And one day, high natural gas prices will prompt power companies to stop using gas to generate electricity, Mr. Pickens said. At that point, natural gas will shift to a transportation fuel.
And Mr. Pickens will be ready.
One of the companies he invests in, Clean Energy, is the largest provider of natural gas for transportation, such as mass transit systems.
Mr. Pickens said on Monday he plans to hold an initial public offering of Clean Energy shares in October.
E-mail esouder@dallasnews.com
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Copyright (c) 2006, The Dallas Morning News
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