Oil legend T. Boone Pickens sees room for oil prices to rise another 10 percent, as supply isn’t keeping up with demand.
He also predicts President Barack Obama’s offshore drilling plan will have little impact.
“All the world can produce is 85 million barrels a day,” Pickens says.
But, “Projections are now that you’ll need 86 to 86.5 million barrels a day," he told Bloomberg. "This is going to move up.”
Oil has departed its prior trading range of $70-$80 per barrel and has now entered a range of $80-$90, he says. Benchmark crude for May delivery recently traded at about $84.92 a barrel on the New York Mercantile Exchange.
As for Obama’s offshore drilling plan, “It won’t make a dent,” Pickens said. “Whatever dent it makes will be 10 years. The market doesn’t pay attention to anything 10 years out.”
Bottom line, Pickens said, “I don’t think you’re going to come up with very much oil.”
Still, he supports the plan. “I’m for anything American because I want to get off oil from the Mideast,” Pickens said. “That’s a security issue for the country.”
Pickens has been beating the drum for natural gas to replace oil. “It’s cleaner, it’s cheaper, it’s ours, and it’s abundant,” he said.
Oil prices have now reached a sweet spot, says Harvard economist Kenneth Rogoff.
“It’s not too low that it’s causing crises in oil-exporting countries. And it’s not so high that it’s threatening the recovery in the U.S. and Europe,” he told the New York Times.
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