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Oil rocketed through $129 early Tuesday after billionaire oilman T. Boone Pickens said oil may hit $150 per barrel in 2008 due to falling oil supplies, and that speculators have nothing to do with record oil prices, CNBC reported Tuesday.Pickens, founder and chairman of BP Capital LLC, said that global oil supply is not keeping up with demand. His view is in stark contrast to OPEC's. The cartel has repeatedly blamed speculators, the falling dollar and geopolitical tensions for oil's astounding increase and record-high price. Oil has risen about 100% in 12 months and is up 486% since 2002.
Oil rose $2.34 to $129.31 per barrel -- an all-time record -- in early Tuesday trading before easing slightly to $128.82.
Jim Dietz, independent energy trader, told BloggingStocks Tuesday T. Boone Pickens's perspective on oil wasn't the only factor in oil's rise to $129, but added that it doesn't take much to get oil moving in its recent, vertical direction.
"Pickens comments on $150 are nothing new, but his comments about supply concerns are. No question, he spooked this market. The dollar's fall also aided oil's price, as usual, so the two combined have provided two strong bullish facts for oil," Dietz said. "It's hard to predict even a corrective pull-back, short-term. The oil bulls are firmly in charge." Dietz added that he is long with gasoline with a daily contract, and long with oil with a monthly contract.
Dietz still sees oil hitting $130 by June 1, but unlike Pickens, is less certain regarding an oil move to $150 per barrel in 2008. "I still sense that demand destruction is about to take place in international markets. We're seeing it here in the U.S. in the gasoline market, and the research I've looked at shows oil costs reaching a ceiling internationally, for most countries," Dietz said. "Nations will increase their use of substitutes."
"And can you blame them?" Dietz added.
The other major energy commodities also surged higher in early trading Tuesday. Heating oil jumped about 6 cents to $3.73 per gallon, unleaded gasoline gained 3 cent to $3.26 per gallon and natural gas climbed 18 cents to $11.13 per million BTUs.
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Reader Comments (Page 1 of 1)
5-20-2008 @ 12:22PM
The Baron said...
Now Boone is a very rich man,but that doesn't make him a genius. And his statement that speculators have nothing to do with high crude prices surely proves that belief. Crude prices rose almost $3/barrel right after his statements were released. Boone speaks of his days as a young boy
in the depression.He should have said young rich boy. I was born in the depression,but I was poor and I'm not too much above that condition today.
I'll swap his depression with mine,any day of the week. Like Trump ,his sucess is the result of his father's being in the right place at the right time,Oklahoma in the beginning of the oil boom. It is defined as happenstance. And Boone is probably
right about that $150/barrel but it will be because
of speculators and prophets whose prophecies are self-fulfilled because of who they are,not genius.
5-20-2008 @ 12:39PM
The Baron said...
And I might add: Isn't it interesting that Boone Pickens mentions falling supplies as the real reason for crude prices when,in fact, we do not have the refining capacity to refine all the crude that is and has been available to us.