Energy/oil billionaire T. Boone Pickens wants those investors who are expecting oil's price to drop amid an oil supply glut to know they are likely to be on the wrong side of history, and fairly soon.Pickens Tuesday reiterated his forecast that oil prices will pass $75 per barrel before the end of 2009, and move considerably higher in 2010, CNBC reported.
"You'll see $85-$90 before the year ends," he said, CNBC reported. Pickens added that he wouldn't be surprised if oil prices topped $100, and added that he expects oil's price to average $80 per barrel next year. Oil traded Tuesday at mid-day up $1.45 to $71.73 per barrel.
Pickens favors increased use of renewable resources, including wind and solar, and, U.S.-based natural gas, in order to decrease U.S. imports of oil and to enhance foreign policy flexibility, among other benefits.
Energy Analysis: Pickens, among others, argues that ramping GDP growth in emerging markets, particularly in Asia, will contribute to the resumption of global oil demand increases in 2010. The prospect of that increased emerging market demand, along with the weak dollar, and talk that certain economic powers (China, France, Brazil, Russia) are becoming increasingly concerned about a further decline in the dollar, due to large U.S. budget deficits, has kept oil's price high, despite the U.S./global recessions and slack demand conditions.
Assuming global economic growth accelerates to 5 percent in two years, it's easy to see how oil's price could hit Boone's 2010 forecast. But even short-term, prices could advance substantially: factor-in a cold U.S. winter and/or above-trend U.S. GDP growth with a return to net monthly job gains (more drivers on U.S. roads), and a plausible argument can be made for an oil price above $80 in 2009.
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Reader Comments (Page 1 of 1)
10-07-2009 @ 12:20AM
Beltway Greg said...
Ah yes, the Sage from San Antonio has ridden back into town to make another prognostication. For T Bone everyday is Ground Hog's Day. He pops his head out of his G5 and makes another prediction about the direction of the oil and/or renewables market. When he says it's going up it goes down and when he says it's going down it goes up. Bone, you've got a 50/50 chance of being correct. What's the problem? Based on his latest handicapping efforts the Saudis' ought to be shaking in their shoes. We could very well see oil at $7.50/barrel. You know why? Cause he's T. Boone Pickens that's why. The only plausible market argument being made here is the argument for senility and retirement.