Oil tycoon T. Boone Pickens warned Newsmax TV
that oil prices will continue to surge back to lofty levels, touching $80 by the end of next year.
“By the end of this year it'll be $50-60 a barrel and the end of '17 I'd say $70-80,” he told “The Steve Malzberg Show” only hours after oil prices drifted between $44 and $46 a barrel.
“You're coming back up again because you've shut down all the drilling. In the United States you've shut down 80 percent of it. We have 1,609 rigs running in November of 2014. Today we have 342,” he said.
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The chairman and CEO of BP Capital Management spoke on the same day that crude oil prices hit 2016 highs on the back of a rally in the gasoline market and after an industry group reported a surprise draw in U.S. crude stockpiles.
Brent and U.S. crude's West Texas Intermediate (WTI) futures finished regular trading about 3 percent higher, riding on the coattails of a gasoline rally that hit August highs after a series of refinery hikes, Reuters
Brent crude futures finished up $1.26 at $45.74 a barrel. In post-settlement trade, it rose as much as $2.01 to a 2016 high of $46.49. U.S. crude futures settled up $1.40 at $44.04. It gained $2.19 in after-hours trade to reach a year-to-date peak of $44.83.
Pickens says oil prices will continue to soar, in part thanks to the Obama administration’s failure to enact a thoughtful and functional energy strategy.
“We're the only country in the world without an energy policy,” he explained. "Germany, France, U.K., Canada, Australia. The United States, we don't have a state-owned oil company. All the others do have. It's all managed by the government,” he said.
Pickens also explained there’s no real plan to ramp up wind and solar power in the U.S.
“There's nothing wrong with the idea. It's just there's no plan to accomplish anything. [Billionaire environmentalist] Tom Steyer says he wants to get off fossil fuels. I said 'Tom, tell me what will you do if we get off fossil fuels?' I said there's 94 million barrels of oil produced in the world every day. Seventy percent of that goes to transportation fuel," he said.
"Now, you get off fossil fuels, what will you do? He said 'I've turned it over to the government and let them.' I said I can't imagine anybody turning anything over to the government.”
He also said the U.S. doesn’t need Saudi oil. He said a more mainstream, wide-ranging switch from diesel to natural gas “you'll save 3 million barrels of imported oil.”
In a wide ranging interview, Pickens said he has advised Republican presidential hopeful Donald Trump about oil, but didn’t give other details. Pickens believes Trump will eventually win the White House.
Meanwhile in the oil patch Tuesday, crude prices are headed for a fourth straight week of gains, with Brent on track to finish April 17 percent higher for its best monthly gain in a year, despite aborted plans by major producers to agree on an output freeze at a meeting in Qatar earlier this month.
Tuesday's oil rally was also underpinned by a weaker dollar, which fell on expectations that the U.S. Federal Reserve's Federal Open Market Committee (FOMC) will keep interest rates at existing levels. The dollar rallied earlier this year, weighing on oil, as investors braced for higher rates.
(Newsmax wire services contributed to this report).
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