Guessing the future price of oil is becoming a sport, much like speculating on the recession that has yet to technically appear. But that's not stopping Boone Pickens.
Pickens says $150 a barrel this year, even as prices now shoot into the mid-$130s and futures are pointing at $142.
It's supply and demand, Pickens told CNBC, not the declining dollar or air in the price from oil speculators, as some have suggested.
"Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 million," Pickens says.
"It's just that simple. It doesn't have anything to do with the value of the dollar."
Oil is becoming a serious problem for the economy, Pickens warned, pointing out that what Americans pay for fuel now easily surpasses the cost of the war in Iraq.
"We are now paying out...an estimated $600 billion a year for oil," Pickens says. "It's four times the cost of the Iraqi war, and not one of the politicians running for president has anything to say about it. I don't know whether they don't know it, or they don't want to mention it."
Natural gas is the only serious alternative, Picken says. And the only way out of the bind is for the long-predicted recession to occur, and for it to go global, cutting Chinese demand.
Oll prices soon surged to $135 on reports of a sharp decline in U.S. reserves and fears that normally productive fields in Saudia Arabia and Mexico are beginning to run dry.
Goldman Sachs "super spike" analysts Arjun Murti, Kevin Koh and Michele della Vigna are talking spikes to $200 a barrel by 2010. Remember, these are the folks who talked about $80 to $120 oil in 2005, and got laughed at for it. They were soon proven all too right.
For the record, Goldman sees $95 oil this year, rising to $105 in 2009, sharply down from current prices. Thomson Financial reports that Societe General sees $115 a barrel, while Credit Suisse is advising clients to prepare for $120 a barrel crude.
© 2024 Newsmax. All rights reserved.