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In a CNBC interview Tuesday morning, T. Boone Pickens suggested that oil may climb above $150/barrel this year, which was promptly followed by a $2 rally in the commodity.
Birinyi Associates promptly distributed a note to clients which shows that Mr. Pickens' comments should not be ignored. His historical comments, shown below versus an oil price chart, have since been reproduced by Reuters and by CNBC.
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This article has 23 comments:
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Karl Francis
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30 Comments
May 21 08:46 AMI recall his bullish talk in the 1980’s. People who believed him and invested accordingly lost their savings in the end.
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Shaggieman
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62 Comments
May 21 09:01 AM-
Jack Yetiv
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442 Comments
May 21 09:21 AMHaving said that, I do not suggest that he also has been right any awful lot of times. But not when he said oil was going back to $80 in the latter part of 2007.
Jack
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Harus
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12 Comments
May 21 09:33 AMJust like Goldman Sach the day before, a bugle call.
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Steven Ward
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213 Comments
May 21 10:07 AM-
william
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16 Comments
My Website
May 21 10:12 AM-
anaconda
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36 Comments
May 21 10:39 AMAlso, it depends on whether Brazil's huge oil discoveries pan out, and futher ultra-deepwater, deep-drilling finds additional prospects for tapping large oil deposits.
Uncertainties? You bet, that's were the energy for the market resides.
A good blog is Oil Is Mastery.
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Just Thinking...
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1 Comment
May 21 11:10 AM-
texasgolfer
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63 Comments
May 21 11:22 AM-
whatifu
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1 Comment
May 21 11:34 AM-
Investor612
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37 Comments
May 21 11:36 AMI recently read T. Boone Pickens BP Capital made a cool billion and a half last year. I'd like to share in Mr. Pickens' "trouble."
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BrainPower in Use
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5 Comments
May 21 12:23 PMT. Boone said it best: 'demand is 87m barrels a day, production is 85m' (from a different article on the same conversation). What part of this supply/demand shortage explains your "irrational exhuberance" theory.
Also, governments are what got us into this mess in the first place. They used their power of legislation to 1) limit the ability of oil companies to drill in oil-rich portions of the US and offshore, 2) prevent the construction of more refineries, 3) force existing refineries to formulate a dizzying array of gasoline products to sell in different parts of the country, and 4) threaten the oil companies with windfall profits tax (last year when the 'greedy' oil company were 'profiteering', their profit margins were between 8-10%, quite low, based on the high demand. As a comparison, Apple's profit margin last year was 14.56%; maybe there should be a windfall tax on them). All of these actions limit the supply of oil and/or gasoline.
Additionally, speculators perform a necessary market function: they provide the liquidity that help oil companies offset their risk and thereby *stabilize prices*. Without the liquidity speculators provide, we would already see $150 oil.
Also, the economies of the world are ALREADY suffering due to our (US) disastrous ethanol policies. Have you taken a look at a wheat or corn commodity chart lately? Just because people, and I include politicians in that group, don't believe in the laws of economics, doesn't mean they don't apply. The laws apply to the laws they pass as well.
Lastly, though you claim to be no socialist, all of your claims are. Sit back and watch as our own socialist government passes more and more laws which stifle supply (like the one passed today) and exacerbate the problem. Without government intervention, I predict $150 oil. WITH government intervention, I predict $200 oil.
Anyway, I was just thinking...
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BrainPower in Use
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5 Comments
May 21 12:29 PMYou need to read my previous post to Just Thinking.
And by the way, the problems in this country have more to do with personal over-consumption and governmental over-spending and over-regulation than with oil prices. Oil prices are just a symptom, not the cause.
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Karl Francis
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30 Comments
May 21 02:56 PMThat statement is nonsense. All serious sources say that right now, production is exceeding consumption. So far this year, the IEA has twice cut its demand forecast for 2008 and is estimating that by the end of the year, spare capacity will be the highest of recent years. Oil analyst Alex Bush, for me one the best informed, today said that he thinks the oil production currently exceeds consumption by 1.7M barrels/day. It's a speculation against fundamentals reminiscent of the early 1980'.
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BrainPower in Use
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5 Comments
May 21 03:49 PMIf you read the April IEA report, the downgrades were due to "changes in methodology and baseline data revisions". In government-speak, this means they cooked the books.
Also, they recently revised their 2007 demand (that's right the 2007 demand) up by 140kb/d and revised their 2008 estimate to be a demand 1.3mb/d higher than 2007. By the time these idiots get the numbers right, it will be 2009 and we won't even be having this discussion.
I will trust a professional investor/trader's tools and sources of information more than a government bureaucrat 7 days out of 7.
As far as Alex Bush goes-never heard of him. So I looked him up on the internet. No Alex Bush oil expert. I found a musician. I found a game maker. I found an actor, a football player and a guy on AOL eating flies. But, no Alex Bush oil expert. I'm not saying he's not; I'm just saying I could verify his credentials.
I guess, then, that we agree on the effects of a supply shortage, but use different tools to determine if there actually is one.
Cheers.
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Lucky
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2 Comments
May 21 04:09 PMThis would be a good email to send to all of your friends
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Lucky
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2 Comments
May 21 04:13 PM-
BrainPower in Use
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5 Comments
May 21 04:19 PM-
Edward Janeck
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133 Comments
My Website
May 21 04:32 PMtheinvestingspeculator...
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BrainPower in Use
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5 Comments
May 21 05:11 PMIf you removed oil companies from the NY state retirement plan, you would crash every municipal, fireman's, policeman's, teacher's, and union retirement fund in the country. Good luck getting buy-in on that one.
Interesting how you use the phrase "My feeling exactly..." which makes you "feel" good about your position but you supplied no information to support it.
By the way, the "root of the problem" is America's addiction to consumption (as indicated by our rising debt levels) and government over-regulation of the oil industry (well, really, every industry).
"Something needs to be done". You are right. Why don't you go do the thousands of hours of research required to formulate a workable solution to the problem and get back to us. During your research, I think you will find that socialist dreams and feel-good platitudes will not solve many problems.
Meanwhile the results of MY 15 years of research follow:
I agree that we should eliminate the root of the problem. So, let's stop government subsidies on ALL forms of energy and let the market decide which one works. Let's remove the artificial barriers that make oil exploration and processing expensive. And, here's a thought, remove the sales taxes on gasoline; the federal government makes as much per gallon of gas as the oil companies do, and they have no risk (add in state taxes and the net winner is the government).
As to your use of "greed". Greed is, by definition, the "desire for more of something (as money) than is needed" (Merriam Webster).
I don't personally subscribe to the philosophy that getting paid for your work, your research or your risk is greed. I DO subscribe to the philosophy that the desire for MORE than you deserve is greed.
I bet, that by your own definition, you yourself are greedy. I assume that you have dinner at least three nights per week. If you do, then by definition, you are greedy, because there are people in this world who need your food more than you. Therefore you, by comparison, have more than you need, ergo you are greedy.
The politics of wealth-envy are easily subverted to whatever means your adversary desires.
Am I the only one on this board who feels like this? We have to stand up and be counted. The feel-good, hand-wringing, socialist philosophy has become rampant. Announcements like "Something should be done!" are worthless if there are no solutions offered. I know there are those out there who believe as I do. If we stand by and do/say nothing, we will deserve it when the others come grasping for what belongs to us.
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Ronmac
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49 Comments
May 21 05:56 PM-
JKC1967
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20 Comments
May 21 06:18 PM-
Eric Fox
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181 Comments
My Website
May 21 09:03 PM"Iraq dramatically increased the official size of its oil reserves yesterday after new data suggested that they could exceed Saudi Arabia’s and be the largest in the world. The Iraqi Deputy Prime Minister told The Times that new exploration showed that his country has the world’s largest proven oil reserves, with as much as 350 billion barrels. The figure is triple the country’s present proven reserves and exceeds that of Saudi Arabia’s estimated 264 billion barrels of oil. Barham Salih said that the new estimate had been based on recent geological surveys and seismic data compiled by “reputable, international oil companies . . . This is a serious figure from credible sources.”