Oil to reach $100 a barrel by end of 2016: Pickens

[BLACKEAGLE]

By Rory Carroll

SAN FRANCISCO Wed Mar 25, 2015 2:10am EDT

A vintage Shell sign is seen illuminated at a Shell gas station in Cambridge, Massachusetts, December 12, 2014.

Credit: Reuters/Brian Snyder


(Reuters) - 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 CLc1 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.

(Reporting by Rory Carroll; Editing by Joseph Radford)
Oil to reach $100 a barrel by end of 2016: Pickens | Reuters

 

[crimsonghost747]

Well, it's entirely possible. In the west all larger oil producing companies are public ones, so their job is to generate money. They will simply NOT drill new wells in areas where it is not profitable, so prices will not stay this low forever. It's a bit of a different story in the middle east where most oil companies are owned by the government and thus have a much more political agenda than their western counterparts.

 

[kana_marie]

I think this may be a good time for more people to look into electric cars. This whole situation where we are dependent on oil regardless of the price just isn't reasonable anymore. It's time to break those chains and free ourselves of that burden.

 

[crimsonghost747]

I think this may be a good time for more people to look into electric cars. This whole situation where we are dependent on oil regardless of the price just isn't reasonable anymore. It's time to break those chains and free ourselves of that burden.

Electric cars are definitely going to be taking a larger share of the market in the future. However, for the moment, I see this as a 3rd world solution as there is a lot of infrastructure that is needed to use them properly. In Africa they are still having trouble getting the electricity to work 100% of the time for buildings, much less for cars. Asia.. I imagine the infra is far from being ready either.

 

[kana_marie]

Electric cars are definitely going to be taking a larger share of the market in the future. However, for the moment, I see this as a 3rd world solution as there is a lot of infrastructure that is needed to use them properly. In Africa they are still having trouble getting the electricity to work 100% of the time for buildings, much less for cars. Asia.. I imagine the infra is far from being ready either.

People in the US really do take so many things for granted! I've seen some people get VERY irate over just a couple of hours without power. I can't imagine if they lived in one of those countries. They wouldn't know what to do with themselves

 

[UAE]

Not sure if Saudi Arabia will allow that happen or not. If Iran and Russia withdraw from Syria and Iran reached an agreement regarding its nuclear program then yes oil prices might go again to where it was $100 per barrel.

 

[crimsonghost747]

Not sure if Saudi Arabia will allow that happen or not. If Iran and Russia withdraw from Syria and Iran reached an agreement regarding its nuclear program then yes oil prices might go again to where it was $100 per barrel.

I don't think you understand how this works. Instability in the middle east region pushes the prices up. Stability pushes them down.

 

[Scorpion]

I don't think you understand how this works. Instability in the middle east region pushes the prices up. Stability pushes them down.

Can you explains how Oil prices went down recently despite the instability in the ME?

 

[crimsonghost747]

Can you explains how Oil prices went down recently despite the instability in the ME?

Sure. Instability in the region is only one of the things that affects the price because people speculate that instability could cause problems in the production facilities or in shipping the oil out.

The current drop in price is due to the simple fact that the world is producing more oil than it is consuming. China's economy is slowing down which is pushing down estimates for future use and North America has significantly increased production, whereas the Saudis keep increasing production too to keep the market share. So simple supply and demand, there is more oil being pulled out of the ground than we are using. For example here you can take a look at the US inventories, as you can see they have been increasing for quite a while. U.S. Total Stocks of Crude Oil and Petroleum Products

There are also a lot of people (myself partly included) who see that the Saudi's are doing this on purpose in order to force the north american oil industry to cut on capital expenditure. (= drilling new wells and searching for oil in new areas)