T. Boone Pickens, the revered oil investor and sage, just appeared on CNBC this morning to discuss oil prices. If traders pay attention to one man on oil on television, it is he. He is still bullish on oil prices and he thinks we are about to see $70 oil pretty quick. He thinks some of this is more inventory drops and he isn’t sure that the oil to refill it is available. He thinks this is 90% supply and only about 10% geopolitical (Iran). Pickens thinks the gasoline market will stay tight as refineries have been down longer than expected, and he notes that the infrastructure is old (Valero refinery that was supposed to be down 2-3 weeks and will end up being down 2-3 months). The oil available right now is lower quality and he thinks that the 85 million barrels per day is really all the world can produce right now. Pickens did say that if the economy slows it can lower oil demand, but 1.5% to 2% GDP growth where he sees it will still drive oil prices up.
Pickens noted this morning in his prediction on oil prices per barrel: $75 before $55
Jon C. Ogg
March 29, 2007
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