Tags: Pickens | Oil | one hundred | forty eight

Pickens: Oil Could Hit $148 This Summer

Wednesday, 04 Apr 2012 12:11 PM

Oil prices could hit $148 this summer due to global supply constraints and geopolitical tensions, says noted oilman T. Boone Pickens.

OPEC giant Saudi Arabia has pledged to unload spare capacity onto the market to make up for shortfalls stemming from global sanctions against Iran, who is facing an oil embargo from Europe starting in July due to its nuclear ambitions.

That won't work.

"It’s tight now. That’s why you have Brent North Sea $126 and you’ve got WTI at $105," Pickens tells CNBC.

"I don’t think they can cover."

Pickens was referring to the U.S. blend of crude, West Texas Intermediate, or WTI, and the European blend from the North Sea, Brent.

Brent is more expensive than WTI thanks to tensions with Iran, who exports heavily to Europe.

U.S. motorists, however, still suffer on rising Brent prices because the blend heavily influences gasoline prices worldwide.

"I’m not saying WTI — our price here in the United States — will go up to $148. It’s been very stable around $100," Pickens says, adding Americans still have it good.

"We have the cheapest oil by 20 percent, and we have the cheapest natural gas by 80 percent, and we have gasoline at $4, Europe at $9. So, I don’t understand why people are complaining," he says.

Still, $4 for a gallon of gasoline, only pennies away from the nationwide average today, is unacceptable for politicians and will likely prompt the Obama administration to tap into the country's emergency crude oil stockpiles, known as the Strategic Petroleum Reserve.

"Further price advances will only up the odds of a strategic petroleum reserve release while at the same time encouraging additional OPEC production gains that have been on the rise since late last year," energy trader and consultancy Ritterbusch and Associates conclude in report, according to the Associated Press.

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2012-11-04
Wednesday, 04 Apr 2012 12:11 PM
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