Oil baron and billionaire T. Boone Pickens said early this morning on a CNBC interview that the price of crude is unlikely to fall much below $100 per barrel. His argument is fundamental rather than technical and he noted his opinion is because of price supports by producers.
He said OPEC would support oil at $100.00 per barrel, but he noted that he isn’t sure if this is the case yet today. He further noted that those who believe oil is going back down to $60.00 per barrel do not understand how the countries which own the oil think and he doesn’t believe they will let it go back down to that level.
Pickens did note that he was not surprised by yesterday’s price plungeof 10% after the House of Representatives failed to pass the rescuepackage with November light sweet crude going back down to under$97.00. Pickens further noted that the bailout is crucial to revivingthe economy and blamed yesterday’s rejected outcome on a lack ofleadership. HE does believe something new or modified will get passedthis week.
Pickens also got to answer questions about his hedge fund’s performancewith oil stocks trading down sharply. He said that some clients have notified the chance that they may withdraw funds at year end. While we didn’t hear any formalnumbers, it sounds as though he’s seen additional losses in thoseequities he owns despite his notation that he was comfortable with thefundamentals of many names.
Jon C. Ogg
September 30, 2008