T. Boone Pickens Still Sees $100+ Oil (CLNE, OIH, XLE)

The great oil sage T. Boone Pickens was just on CNBC for a quick interview while he was out in California today to kick off the Long Beach and Los Angeles harbors to switch trucks over to natural gas for his Clean Energy Fuels Corp. (NASDAQ: CLNE).  This is his liquid natural gas company out in California that is meant to replace diesel.

He said oil prices will continue to rise because we have no control over our destiny there.  He is talking up natural gas to replace diesel, which he said natural gas can be 50% to 70% cleaner than diesel.  As far as price parity, Pickens said LNG measured gallons comes in today at $3.55 per gallon of diesel versus $3.29 for liquid natural gas and they both take you the same distance.

As far as future oil prices, Pickens said "Get ready for $100.00, you’ll see $100.00 oil before $80.00."  His point is that oil exporters have seen how high we’ll continue to pay, and he even said that this is likely going to become the norm.   He thinks that the global production capacity is 85 million per barrels per day now, and he noted you have to 1,000 wells pumping 1,000 barrels per day to get just 1 million barrels per day.

• Clean Energy Fuels Corp. shares are up about 5% at $15.00 today, and the post-IPO trading range this year has been $10.81 to $20.65.   Pickens can sometimes impact the sector with his calls:
• the Oil Services HOLDRs (AMEX: OIH) are up 0.6% to $186.47 today;
• the Energy Select Sector SPDR (AMEX:XLE) is up 0.4% at $77.25 today.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.