US Oil Baron Sees Crude At $100 By End Of 2016
Photo Credit :
Oil prices could hit $100 a barrel by the end of next year, U.S. oil magnate T. Boone Pickens said on Tuesday, revising his previous forecast which said they would reach that level as early as this year.
"I think you could very well be at $100 a barrel by the end of 2016," the 86-year-old billionaire and chair of BP Capital told an audience of about 100 at the Commonwealth Club of California in San Francisco.
Oil prices have fallen sharply amid weaker Asian and European demand and a boom in North American production. U.S. crude futures have dropped more than 60 percent since highs last summer and were at around $47.40 a barrel on Tuesday.
Pickens said the idea of "peak oil" – the point in time at which oil production will go into an irreversible decline – shouldn't be dismissed on account of the increase in U.S. production. Other regions are seeing their output decline, he said.
A lifelong Republican, Pickens said he would support Jeb Bush if he decided to pursue the party's nomination in 2016, as is widely expected.
"The Republicans will win in 2016," said Pickens, who has donated heavily to Republican presidential candidates in the past, including Jeb's brother, former President George W. Bush.
Mohammed Al Madi, Saudi Arabia’s OPEC governor, said on Sunday that oil is unlikely to rebound to $100 any time soon because higher prices would spur more output and prolong a glut.
Crude prices at that level will let the high-cost producers come back again, Madi said at a conference in Riyadh. Saudi Arabia is pumping at a near-record level of about 10 million barrels a day, Oil Minister Ali Al Naimi said.
Crude futures dipped on Wednesday as ballooning US storage volumes pressured prices, a trend some analysts said they expected to continue for another two months.
Brent oil futures were trading at $55.06 a barrel at 0508 GMT, down five cents, while US WTI crude was at $47.36 a barrel, down 15 cents.
For Brent, strengthening European manufacturing data lent contracts some support, preventing steeper price falls.
The bigger fall in US prices came as American crude stocks appeared to extend their long streak of weekly builds.
"US crude stocks will build through May ... (which) should support bearish sentiment for now," Morgan Stanley said in a note on Wednesday, adding that there was still plenty of storage capacity left for inventory gains.
A poll of eight analysts - taken ahead of weekly reports from industry group the American Petroleum Institute (API) and the US Energy Information Administration (EIA) - forecast a crude stock build of 5.1 million barrels on average last week.
The API report on Tuesday showed a slightly smaller build in US crude stocks at 4.8 million barrels for last week. Any build from the more closely watched EIA figures due out later on Wednesday would confirm US crude stockpiles have hit a record for an eleventh straight week.
In Japan, commercial weekly crude stocks were down 2.8 per cent to 82.87 million barrels. The year-on-year change was a drop of nearly 8 per cent.