Legendary energy entrepreneur T. Boone Pickens is putting his money where his mouth is.
He told
Fox Business Network that oil will rebound to $100 a barrel in 12 to 18 months. U.S. crude traded at $48.98 Thursday, after dropping to a 5 ½-year low earlier in the week.
"Demand, with the lower price of oil, demand will come up," Pickens said. So will merger and acquisition activity in the oil patch.
And the chairman of BP Capital Management wasn't shy about snapping up energy stocks in the third quarter, pushing the firm's portfolio to a 97.8 percent weighting in energy stocks,
Guru Focus reports.
Pickens bought three new stocks in the energy sector in the third quarter: Western Refining (WNR), WPX Energy (WPX) and Gastar Exploration (GST).
The tally: 158,982 shares of Western Refining, whose stock price averaged $43 in the quarter; 44,363 shares of WPX Energy Inc., whose stock averaged $24; and 177,549 shares of Gastar, whose stock averaged $7.
Morningstar analyst Allen Good likes Western Refining too, putting its fair value at $56.
"We expect Western to continue delivering strong results, as it remains positioned to take advantage of ongoing wide differentials due to growing Permian production exceeding takeaway capacity," he wrote on Morningstar.com.
"Even if differentials narrow at times, Western still stands to benefit from lower transportation costs thanks to infrastructure investments designed to feed high-quality Permian crude directly to its refineries."
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