T. Boone Pickens: Oil Going to $150.00 a Barrel

[oldpol]

Source: CNBC

Pickens: Oil Going to $150 CNBC.com | 20 May 2008 | 08:58 AM ET Texas oil billionaire Boone Pickens says President Bush was wasting his time traveling to Saudi Arabia to ask for increased oil production.
The Saudis claim they have more oil," Pickens told CNBC. "They don't. The President wasted his time to go to Saudi Arabia, to say, 'Give us more oil.' They can't give any more oil...they're stacking up the money as fast as they can stack it up."


Pickens expects the price of oil to continue rising.
"Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 million," he said. "It's just that simple. It doesn't have anything to do with the value of the dollar."
He expects the price of a barrel of oil to reach $150 this year, and he insists speculation has nothing to do with it. Buying oil is draining an enormous amount of money from the United States, he says.

"We are now paying out...an estimated $600 billion a year for oil," he said. "It's four times the cost of the Iraqi war, and not one of the politicians running for president has anything to say about it. I don't know whether they don't know it, or they don't want to mention it."
Pickens says natural gas is the only American resource that can reduce oil imports. He claims the effective use of natural gas could reduce oil imports by 40 percent. He dismissed ethanol as an alternative. He added that what reduced demand there has been in the United States has immediately been picked up by China.

"The only way I see that oil doesn't continue to rise if we had a global recession." he said. "That will happen at some point, but I don't see the Chinese stumbling until after the Olympics."



Read more: http://www.cnbc.com/id/24723260

[Newsjock]

1. This year?

More like next month.

[lutefisk]

3. Too late for Memorial Day. How about $150 by the 4th of July?

Things are spinning out of control.

[KillCapitalism]

7. I agree with you.

We might see $200 on Dec. 31, 2008.

[oldpol]

8. and 70-80.00 a barrel by 2009-2010

according to most speculators (without a regional war of course)

[happyslug]

28. If that was true why so high NOW??

Krugman hit it on the nail last week in his Column, when you have a price increase do to speculation, you see an increase in stock piles of oil. Such increase in stock does NOT exist at the present time.

For more see: http://www.nytimes.com/2008/05/12/opinion/12krugman.html

I quote his article:

The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling.

But it hasn’t happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth.

Other experts in the field have actually pointed out that in the last two years WORLD WIDE storage of oil has actually DECLINED. In simple terms there appears to be a REAL SHORTAGE, that the right does NOT want to accept, for to accept it means to address it, and that means coming out with a way to reduce DEMAND. We can reduce demand by leaving the price go higher and higher, we can reduce demand further by increase taxation, we can reduce demand by buying less. This reduction is often do to increase price but the US military uses about 5% of world wide oil usage, thus a withdraw from Iraq AND mothballing the Navy and Air Force (And telling the Army to learn to March) may be the best way to reduce the present price of oil.

[MikeNearMcChord]

2. And if Bush greenlights Iran, it will be higher than that,

[jimshoes]

4. Lovely

:mad:

[Delphinus]

5. Well, actually,

the value (or lack thereof) of the the dollar does play into this.

[high density]

6. He says the supply is off by ~2% and that is causing oil prices to go rocket?!

I don't buy that for a second. Crazy speculation is behind it. The stock market was flat or down slightly, so it was time to jump on the commodity bandwagon.

[NickB79]

26. Remember, small declines can ripple out into large price spikes

For example, the 1970's oil embargo by OPEC only took 5% of the world oil supply off the market, and we all saw the effect that had on prices.

Once demand passes supply, the price increases stop being linear and instead look more exponential. This doesn't apply just to oil, but to just about any other good that doesn't have a readily available substitute.

[SlingBlade]

9. Quote ”speculation has nothing to do with it”

Sez an Oil Speculating Whore :puke:

[Hobarticus]

16. Maybe, but he has a point...

This is a mess of our own doing. We're addicted to the stuff, and we keep throwing tax money at Detroit to bail out and perpetuate a failed business model.

[rustydad]

29. Exactly

Take a hundred heroin addicted people. Give them all the money they need to buy heroin. Then reduce the supply by a small percentage of what they consume, say 5%. Will the price go up 5%? No it will go up until someone runs out of money. We are out of money as a nation and doing what any fool would do, print more. But the heroin dealers aren't fools. They will still sell us heroin but only for lot's more money. We are screwed. Bob

[aquart]

10. I want every dime of that profit in a windfall tax. Every dime.

[Dreamer Tatum]

19. From the Saudis, you mean?

Talk about getting over on us...

[Winterblues]

11. Has absolutely nothing to do with the declining dollar

He is full of as much BS as the king of BS, Bush* himself.

[NBachers]

12. So how's that SUV strategy working out, Detroit?

We knew decades ago this was happening. Detroit refused to do anything about it, and Reagan torpedoed Carter's energy policy as soon as he got into office. And the American people went on an oil-glut orgy at the precise moment when we should've been developing new technologies. It all comes back to voting and behaving Republican.

VOTE REPUBLICAN - PAY THE CONSEQUENCES

[ToughLuck]

13. I think I may name my next child Prius.

[liberal N proud]

14. $$$$$ Because he wants it that way $$$$$

$$ As his pockets jingle all the way to the bank $$

[Mnpaul]

15. Good

Now T Bone can pay off on that bet with John Kerry that he chickened out of.

[Raster]

17. Bullshit. Pickens IS AN OIL SPECULATOR. Of course he will say that speculation has nothing to do

with the current price. Several things to consider: "most" of the oil the USA imports comes from sources not currently in play by China or India, so world demand has not really hit the USA-YET! For all practical purposes, nothing has changed with the USA's oil supply--supply, demand, refining, delivery, etc.--over the last seven years EXCEPT FOR PRICE. The Texas Petroleum Mafia sets the price of oil sold in the USA. They are the producers, sellers and speculators. Exxon is posting record profits EACH AND EVERY QUARTER, and has been for eight years. Do. The. Math. Does anyone remember cheney*'s top secret energy commission, you know, the one where even the names of the attendees is a state secret, as are all meeting minutes, records, etc.? Again: Do. The. Math.

[Robbien]

24. True. The biggest speculators are the ones projecting huge increases in prices

Just making the prediction makes the stock trade price go up.

Makes one wonder how big the pile of long bets these speculators have and how much money they made on their bets just by making public their predictions.

Of course to do this is illegal and these oh so honest traders would never participate in such things. Trust them.

[sabbat hunter]

25. he predicted

wrongly that oil prices would go down, and lost money earlier this year as a result.

Boone Pickens says correctly we need to get off of oil and on to renewable sources of energy like solar and wind.

[graycem]

18. He's following the money..

that's why he's going to be talking up alternatives and wind energy. He's spending several billion putting up wind farms up here in Texas plus he's getting money from the government on some land that had corn planted on it (for ethanol which turned out to be a dumb idea)obviously. This year a lot of those corn growers are using their land for the placement of wind turbines, but he's the biggest investor.

[UNCLE_Rico]

20. Hate to say it but he's right...

Just because his motivations are suspect doesn't mean he's wrong.

People, a 2 million bpd shortfall between supply and demand is friggin HUGE. What people don't seem to understand is that this scenario has really never happened before in our history. The world has always been able to produce more than we could use ... this fact promoted competition amongst suppliers that kept the prices at reasonable levels in most years.

Now that world demand has exceeded world's capacity to supply, the only practical limit to what the 'haves' can charge the 'have-nots' is whatever doesn't cause severe demand-reduction. And even if they DO destroy demand, they STILL KNOW that whatever they keep in the ground is gonna hold it's value very nicely, thank you very much, because that demand WILL BE BACK.

There are NO mechanism's in place really to stop all of us from getting completely screwed over in this scenario. No world police-type body that can do anything about this. SO MANY of us have been screaming from the rooftops for YEARS about what was going to happen when the world reached PEAK OIL but have been dismissed as Cassandra's by the right and left alike.

And the value of the dollar IS linked to this, but it's not how you guys think. In REALITY, the DOLLAR IS LOSING VALUE because the PRICE OF OIL is GOING UP ... and this is due to very basic market fundamentals in the oil market, and the fact that oil is denominated in dollars for the most part world-wide.

Speculation cannot really drive oil prices up like the way we're seeing either. If you think it can, please explain the mechanism to me, and WHY it is that speculators can't just drive the price up on EVERYTHING just by speculating that the price will rise, forever and ad nauseum? It doesn't work that way guys, there HAS to be market fundamentals in place for a run-up in price like we're seeing. Pickens is giving y'all the sad truth, and apparently, you can't handle the truth ...

[NickB79]

27. "you can't handle the truth"

Words of wisdom.

A few of us over on the Environment Forum have been trying to get the word out about Peak Oil, but far too many people can't seem to handle the implications of it. So, the head goes into the sand, or the fingers into the ears, and nothing changes.

[truebrit71]

21. That will happen by the end of summer...it;s going to $200/barrel....probably by winter..

...what convenient timing...

[Blue_Tires]

22. T. Boone still has to bankroll OSU athletics

with that cash, he can build a time machine to make them retroactive champs in every sport...lalz

[ladjf]

23. That's why Pickens is building one of the largest wind farms in

the world right in Texas.

[cliss]

30. Very nice post, and I agree.

We need to get real and start accepting reality: the Saudis don't have any more oil to sell. I think just getting that fact out is going to make a big difference is shattering our illusions of "limitless" oil. It's not.

It's truly amazing how deep the delusions run regarding oil. People (including the candidates) are looking at all the reasons / causes / except the correct ones.

Limited supply = declining oil = cut back.

[roamer65]

31. The Saudis are making a BIG mistake stacking up US dollars.

[wishlist]

32. He is unreliable, predicted a few months ago that oil would drop to $80/barrel

He did his best to talk down the market just a few months ago in the winter when he confidently said that by the second quarter (now) we would see oil back down to $80 a barrel. Now that he was so completely wrong, he espouses the opposite. Markets are notoriously unpredictable. Many experts cannot understand how we can have such high oil prices and inflation with rock bottom interest rates and stock market that hasn't totally tanked. Something has to give, either prices stabilize or go down, or stocks tank as interest rates rise.