Tags: Beaman | Pickens | oil price | economy

Economist Beaman to Newsmax TV: Pickens is Wrong, Oil's Not Headed Back to $90-$100

By    |   Tuesday, 23 December 2014 04:58 PM

Legendary energy entrepreneur T. Boone Pickens has it all wrong on oil, Steve Beaman, chairman of the Society to Advance Financial Education, tells Newsmax TV.

Pickens predicted to CNBC on Tuesday that Brent crude will rebound from its recent five-year low to $90 to $100 a barrel in 12 to 18 months. The $100 level would represent a 61 percent rise from Tuesday afternoon's price of $61.99.

But Beaman tells Newsmax TV's "MidPoint" show that Pickens is just "talking to the futures traders hoping to get them to bid the price back up."

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Officials from OPEC nations have recently talked up the idea of oil prices stabilizing around $80, Beaman notes. But "all of that doesn't take into account that it was just released that the United States has only 10 percent of the world's shale oil capacity," he says.

"In South America, they just discovered a great, big shale oil reserve. Supplies will keep coming online, keeping that price a lot lower than $100 a barrel."

The United States can't simply cut ties with OPEC, Beaman says. "There's more to that [than oil prices]. The geopolitical reality is that we need Saudi Arabia as a pseudo ally, let's call them. So we want to keep them as a trading partner in this arena."

Bottom line: "we're not going to cut out OPEC anytime soon, but we do want to keep an eye on the price because it's helping consumers right now," Beaman says. "And it could help to spur a global recovery. Right now, Europe and the Far East are experiencing a real slowdown."

As for the United States, where oil production has hit a record high, "the shale oil revolution is really taking hold now, and it's going to continue, there's no question about it," he says.

"That's good for American consumers, it's good for American employees out looking for jobs. . . . It's good news for the economy."

Of course, we don't want OPEC to regain the power it had in the 1970s and 1980s, but that's not a real worry now, Beaman says.

"We are the world's largest provider and supplier of oil in general. We're a net exporter of oil, so they don't have the kind of control they had on us right after we took the dollar off the gold standard [in 1971]."

Meanwhile, Beaman is impressed with the economy's 5 percent growth rate for the third quarter, the biggest in 11 years.

"The 5 percent number is significant," he says. "If you take a $17 trillion economy and grow it at 5 percent a year, that's a lot of growth that we're looking at. Hopefully it will carry on into the fourth quarter, which we've expected to be good."

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Legendary energy entrepreneur T. Boone Pickens has it all wrong on oil, Steve Beaman, chairman of the Society to Advance Financial Education, tells Newsmax TV.
Beaman, Pickens, oil price, economy
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2014-58-23
Tuesday, 23 December 2014 04:58 PM
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