Tags: Pickens | energy | oil | prices

T. Boone Pickens: 'Don't Panic; Energy Boom Isn't Over'

By    |   Friday, 10 October 2014 01:25 PM

Though U.S. crude oil prices dropped to a two-year low Friday and energy stocks are plunging, investors shouldn't give up on the sector, says legendary energy entrepreneur T. Boone Pickens, founder of BP Capital.

"Let's don't panic here that the energy boom is over and everything's gone to pot, because I don't think for a minute that's what's going to happen," he told CNBC.

November West Texas Intermediate crude futures traded at $85.85 late Friday on the Nymex, down 25 cents from Thursday. Earlier the contract dipped to $83.59, the lowest level since July 3, 2012.

Prices are sagging amid sluggish demand that owes to subpar global economic growth.

"I can see it [Brent crude oil] going under $80. I don't see $70, but I see it under $80," Pickens predicted. "Under $80 you're going to start to see the E&P [exploration & production] companies, they'll start cutting their capex [capital expenditure] and it'll sober everybody up."

Meanwhile, production is booming, especially in the United States. U.S. oil output stands near its highest level since 1986, thanks largely to the shale revolution.

As for a potential slowdown in U.S. production, "oil has been there 300 million years, so it isn't likely slowing down and losing anything. It just slows down, and when the price comes back up, everybody goes back to work again," he explained.

"Energy is cheap in America. We still have the cheapest energy in the world," Pickens added.

"Take advantage of it, play the demand side."

But many market participants say the rout isn't over yet.

"WTI is on track to at least touch $80," Bill O'Grady, chief market strategist at Confluence Investment Management, told Bloomberg.

"The global economy is slowing and that's going to impact demand. OPEC's gotten a free ride the last few years because of the low level of Libyan production, but they're back now."

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Though U.S. crude oil prices dropped to a two-year low Friday and energy stocks are plunging, investors shouldn't give up on the sector, says legendary energy entrepreneur T. Boone Pickens, founder of BP Capital.
Pickens, energy, oil, prices
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2014-25-10
Friday, 10 October 2014 01:25 PM
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