May 29th 2015- Business Finance
After correctly predicting in December that half the fracking rigs in the U.S. would be shut down this year, T. Boone Pickens is now calling for the price of oil to reach $75 by the end of the year. Speaking Thursday in Las Vegas at the SkyBridge Capital SALT conference, the 86-year-old founder and chief executive of BP Capital pulled no punches when talking about everything from the hazards of fracking to the Keystone pipeline to Washington politics and the 2016 presidential election.
“I’m about to give up on Washington being able to figure anything out,You can’t have a five-minute discussion in Washington about oil, because in three minutes they’ll run out of what they know.” – T. Boone Pickens
He takes particular issue with the political gridlock surrounding the development of the Keystone pipeline, which has been approved by both houses of Congress, but has been blocked by President Barack Obama .
“This Keystone business is so routine, it’s disappointing to me that it’s not getting done,” he said. “There are 250 billion barrels of oil in Northern Canada that will be connected to Keystone.”
He believes that the project will eventually get done, but only after a Republican is elected to the White House, another issue on which he does not hide his support.
His oil price prediction, which would have the commodity spike 27% from current levels of around $59 a barrel, is based largely on supply and demand fundamentals.
“Last year, you had 1,609 rigs running for oil, and I said in December that we would see half those rigs go down in four months, and now we’re down to 622 rigs,” he said. “Right now, demand is very, very good for oil, and supply starts to go down, so the price goes up.”
On keeping energy prices down, Mr. Pickens banged the drum for alterrnative sources of energy, but stressed that “you can’t power an 18-wheeler on batteries.”
In a reference to his 2008 plan to embrace alternative energy, he confessed, “I lost $150 million in the wind business, so that changed my mind.”
When asked about controversial connection between fracking and earthquakes, Mr. Pickens made it clear he does not believe there is a connection.
“I am 100% not kidding, I’ve never seen an earthquake that was caused by a fracking well,” he said. “It doesn’t happen, that’s not how it works.”
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