Tags: Pickens | cheap | oil | gas

Pickens: Cheap Energy Gives US Economic Leverage

By    |   Thursday, 23 August 2012 09:48 AM

The United States will likely continue to have an edge over most other countries due to its comparatively cheap energy, even with oil and natural gas seen rising in coming months, says energy investor T. Boone Pickens.

Pickens, founder of BP Capital, tells CNBC that natural gas may climb to $4 by the end of the year, from below $3 currently, but that’s not a major price spike that would lead to a flood of new drilling.

“You can make money at $4. … But you aren’t going to get many wells drilled,” he says.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

Pickens sees West Texas Intermediate crude surging to $115 a barrel by the end of the year on political unrest in the Middle East, including a possible Israeli attack on Iran. But the effects won’t be long lasting.

If Israel bombs Iran, he says, “you’re going to have a spike up in oil prices.” But that would reflect political risk, “not because you’re going to have a shortage of oil immediately.”

Oil prices would recede and the United States would continue to benefit from the cheapest energy in the world, he notes.

“U.S. crude is 15 percent cheaper than Brent North Sea crude oil, and natural gas is 75 percent cheaper than China, the Mideast, Japan or wherever else,” Pickens tells CNBC.

And that cheap energy should be used to help rebuild the economy. “You can build your economy back on cheap energy,” he adds.

Meanwhile, natural gas prices were higher Wednesday as a tropical storm approached the United States and amid forecasts of warmer weather, The Wall Street Journal reports.

Natural gas for September delivery was 1.9 percent higher at $2.827 per million British thermal units on the New York Mercantile Exchange.

"The storm is definitely supportive and the warmer weather," Phil Flynn, an analyst at Price Futures Group in Chicago, told The Journal.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

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Thursday, 23 August 2012 09:48 AM
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