But legendary energy entrepreneur T. Boone Pickens doesn’t think the bad times will last for black gold. In an interview with CNBC, he predicted a price of $70 by year-end and $80 to $90 within 18 months.

Given that U.S. oil output and inventories are at more than 30-year highs, what’s behind Pickens’ forecast?

A plunging rig count in the United States will help spark the rebound, putting supply and demand in better balance, Pickens explained. The rig count totaled 866 last Friday, down 41 percent from a year earlier and 6 percent from a week earlier, according to Baker Hughes.

“We produced too much oil, and now supply is greater than demand,” Pickens said. But with the rig count dropping, “we are getting ready to balance the market.”

Meanwhile, we can thank Saudi Arabia for much of the oil price plunge, according to Richard Fisher, president of the Dallas Federal Reserve. “The Saudis have engineered” the move, he said in a speech last month, CNNMoney reported.

Saudi Arabia led OPEC to reject production cuts, and the nation has offered price reductions to its customers. Presumably the Saudis are trying to drive high-cost suppliers, such as U.S. shale oil producers out of business.

“We are a huge supplier of energy. The Saudis took a while to realize what was going on,” Fisher said, referring to the growth of U.S. output.

Low oil prices also cause pain for Iran, Saudi Arabia’s hated neighbor, he noted.

Given Saudi Arabia’s policy, Fisher doesn’t expect oil prices to rebound back to $100 anytime soon. “From a budget stand point, [the Saudis] have reserves that can handle this,” he noted.

19 Comments on "Pickens: Oil Will Rebound to $70"

Plantagenet on Sat, 21st Mar 2015 7:06 am 



Pickens is right—– the oil glut will end and oil prices will rebound eventually.

Makati1 on Sat, 21st Mar 2015 7:13 am 



‘Black gold’ is only worth what the consumer can afford. THAT is the mistake all these prognosticators seem to misunderstand. But then, their wealth and power depends on BAU and they are seeing it evaporate in front of their eyes. They are witnessing the death of capitalism and their plundering way of life.

This old fart is 86 years old and should be dead, not still plundering the workers of the world. But then, he is not the only old fart still trying to run the world for their benefit. Look at the Forbes 400 list and see that most billionaires are over the hill and will be gone before the consequences of their actions would put them in jail or at the end of a rope.

The Saudis are having their own problems, which should be obvious if the KSA American Embassy had to shut down and lock up to protect Americans. Sure the Saudis can survive for a while, IF they sell billions of dollars worth of USTs to pay the bills. What happens when Russia, China, Japan, etc. all sell theirs also to pay the bills? Hyper inflation comes to America and the dollar becomes real Charmin.

Davy on Sat, 21st Mar 2015 7:38 am 



Geeze Makster that was a pot calling the kettle black “This old fart is 86 years old and should be dead”. Another unrealized gaff is this “But then, their wealth and power depends on BAU and they are seeing it evaporate in front of their eyes” Wow, living in a cheap 10th floor condo in the heart of the overshoot of 12MIL people should classify you as “depends on BAU and are seeing it evaporate in front of their eyes”.

You are seeing it but you are saying it is them not me. I The Makster have a refuge. I, the great Makster, have a jungle Lair complete with pet monkeys. I keep picturing you eating your pet monkeys. I admit I will be eating dog and cat but you Great Makster live in complete denial of the end of BAU as far as how it will affect you.

Your end of BAU is the other guy’s issue and you salivate with the other guys pain. Your righteousness longs for the suffering of the other guy in particular the US. You preach global NUK war that will destroy BAU but a US BAU not an Asian BAU. You disregard MAD and the interconnectedness of BAU to promote a rising Asian Phoenix. Cat Piss Mak!

Makati1 on Sat, 21st Mar 2015 8:05 am 



Jealous Davy? 86 is my parent’s generation, not mine. I’ve got at least 15 or 20 years to go, maybe more. I preach nothing, but you enjoy putting words in my mouth that I didn’t say. The same BS that the US MSM uses to brainwash the sheeple. I only point out the story as I see it from the info I get on the internet.

I do not listen to radio or watch TV or buy newspapers. I do not follow ‘sports’ or fashions or the Kardashians, whoever they are. I don’t give a damn about the fluff that pervades American life these days. It is all deliberate distraction from the Ministry of Truth anyway. It keeps the pitchforks in the barn and the ropes off of the oak limbs and lamp posts…for now.

I tell it like I see it. I see the US behind 90% of the world’s troubles today. I see the leaders of a once great country dragging it through the manure pile behind the barn everyday and pretending the smell is roses. The lies have become so pervasive that even they cannot keep them straight. Yes, the US needs to be taken down and soon if there is to be a world left for my grand kids.

So, you can call me whatever you feel like. Names do not bother me. You can make fun of me, but that doesn’t work either. I had some tack officers in Officer Candidate School do their best to break me and they didn’t succeed. You are an amateur at it.

Just don’t read anything that begins with ‘Makati1’. But, I have said that before and you cannot help yourself, I guess. Maybe you feel the need to print out a rebuttal to my comments for the education of others here. I can assure you that they are all smart enough to make their own call on my comments, pro or con.

Only the future will prove who is correct. I can wait. Maybe I’ll play with one of those monkeys while I enjoy my retirement. I’m not afraid to die, so I’m not worried about the future. I am as prepared as it is possible to be. Are you?

shortonoil on Sat, 21st Mar 2015 8:47 am 



It is possible, but not likely, that oil will again hit $70. To do so it would have to happen in 2015, while the theoretical maximum will still be $77/ barrel. By 2016 it will be $66, and the $70 window will have closed:

http://www.thehillsgroup.org/depletion2_022.htm

Shale companies, at $37 wellhead prices, are losing money by the barrel. However, they still seem to be able to raise the money to do completions on the 1,500 oil wells that were drilled before the price collapsed. This is keeping production elevated, and helping to keep prices depressed. With credit lines closed for most of them, they are raising funds by diluting the shares of the existing stockholders. Who is buying these shares seems to a mystery that we have not yet unveiled. Their long term value is obviously zero. As an example, Whiting Petroleum the largest producer in the Bakken with its credit lines eliminated, has gone to selling new shares of stock. With a forward earnings to market cap value of 1,043 to 1, who would buy into such an investment? It doesn’t seem likely that many investors would be willing to wait 1,043 years to get their money back.

The shale oil fiasco continues, and probable will for most of 2015. Stay tuned, its going to be a show you won’t want to miss!

http://www.thehillsgroup.org

paulo1 on Sat, 21st Mar 2015 9:16 am 



re: “Stay tuned, its going to be a show you won’t want to miss!”

And we have a ringside seat. Plus, we know the machinations behind the curtains, for the most part. I just had family up for a visit for a few days. (Thus, my silence). I did not bring up PO or decline, once!!!! I was amused to listen, though. I did explain junk bond financing and ZIRP effects, but it didn’t register one iota. They did not believe me….at all. It is like BAU is simply a normal state of affairs and why would anything change? It was pretty strange. Very strange.

Oh well. Now I can use my mornings to read comments and articles instead of cooking and listening about life on another planet.

When people do visit we share our lives with them as we do the home-producer thing. Day one I made glazed sockeye fillets, baked potatos and green beans. Day two I cooked Indian curry with elk as the meat base (red curry with home grown tomatoes)…+ all the works and add-ons. Last night it was home grown chicken and left overs. Every night saw a huge spring salad and homemade wines, frozen fruit salad for deserts sweetened with pear juice. Last night the women got into the Baileys.

Today it is quiet and work awaits. The one issue I simply could not let go was debt…personal debt for too big homes/mortgages, cars, and student loans. I gues it reflects whatever paradigm one lives under. My US family comes from the whole upper level university focus and simply cannot imagine another way for young people to emerge into life. Their children have degrees and are now feudal serfs. If there is never occurs another housing boom to sell out of, I don’t think they will make it. I really don’t.

regards

paulo1 on Sat, 21st Mar 2015 9:24 am 



Sorry for the mistakes at the end… What I meant, (and you probably got it just fine), is that their children are not making their way in reality (just by appearances), and if their too big houses do not insanely increase in value and allow them to downsize with some extracted cash they will be working flat out into their late 70s, and still be broke. They are feudal debt serfs due to student loans, ARM mortgages, vehicle payments, etc. But if you drive by it looks like WOW.

Next time I will proof read before sdegndin. (HAH..got you) Regards again.

Davy on Sat, 21st Mar 2015 9:25 am 



Mak, it is always easy to retort to your drivel and puk. I love when you respond because I know I have baited you with truth. Agendist who practice propaganda of selective facts and a reality decouple always respond to the truth. The truth and reality scares them. Children in fantasy have difficulty with the truth and reality. They fight it as long as they can to maintain a facade of a distorted and false reality.

You have no idea what you have left of your life. Your BAU lifespan may be 15-20 years statistically if you consult an actuary. Yet, at your age anything can happen. The end of BAU you likely have 0-5 years. I myself have maybe 0-15 years end of BAU. My BAU statistics are maybe 20 -40 years. So you see Mak fantasy clouds your reality in the heart of overshoot in a poor location for the end of BAU. You are the most exposed of anyone commenting on this forum and you act as though you are the safest.

I can always throw your propaganda drivel back in your face when you claim I am part of your drivel message. I am a flag waving American with the flag upside down in a sign of grave danger. I don’t claim a position on this side or that in a righteous way. I criticize my country as being hijacked. I criticized the culture as in decay and decline. I acknowledge the horrible politics of DC. I constantly talk about the corruption, manipulation, and the theft of the people for a few.

You, Mak on the other hand claim that your home team are the righteous angles of the global community. You claim your team are decoupling from a destroyed BAU. You even say your team will transcend the MAD of NUK war. It is hilarious when you talk about your Asian phoenix rising. It is hilarious how you attack BAU then glorify the Asian version like it is good with its overconsumption. You glorify Asia with its population overshoot then you talk about how bad overpopulation is as if there is no connection with Asia.

You could only wish I would not read anything Makati1. I take great pride and pleasure in destroying your message. It is a message of hate, war, and destruction. You are an agendist bent on a personal message that attacks a country and people because of your resentment for that people. Most of your life was a failure in the US. So you deserted your family and moved away to a third world slum and now preach the death of that very country where your family lives. I on the other hand will stay and fight for my family until the end. I am not a coward like you Mak.

I think it would be more advantageous for your message to ignore me because your can’t win with me. I play mental judo with you. I accept your selective facts of my country. I acknowledge and also preach these problems. Yet, your fantasy and unreality of your super heroes is easy to destroy. You can’t have your cake and eat it Mak. This is a law of nature. Your regions decouple and ascension to super power status is easily refutable and by using your own reasoning. You would be far ahead Makster to just ignore me so you don’t be made a joke. Most of the time you can ignore me. Today you made my day. Thanks Makster.

Perk Earl on Sat, 21st Mar 2015 10:14 am 



“(Pickens)predicted a price of $70 by year-end and $80 to $90 within 18 months.”

Wasn’t it just a couple of weeks ago there was an article in which Pickens was predicting oil price bouncing quickly back up to $100.? looks like he’s decided to back down those numbers.

Watching and predicting oil price is now becoming quite a spectator sport.

rockman on Sat, 21st Mar 2015 10:35 am 



I think a good spot to partially post again from another thread:

Here’s an update on one “beloved” shale play…the Barnett. It highlights the relationship between oil/NG prices and shale development potential:

Barnett rig count 2008 with high oil/NG prices: 175
………………….2009 after NG prices collapsed: 60
………………….2010 after oil prices increased: 85
………………….2013 with much higher oil prices: 60
………………….2015 with much lower oil/NG prices: 3. Yes…not 300…not 30…3

And from local news this morning: there is exactly ONE rig drilling the Barnett Shale. Given what the combination of collapsing oil and NG prices have done to the Barnett Shale it’s amazing to see those efforts to spin the future of the shale plays as anything but negative.

Would be really great to see some cornie climb out of the bushes and explain how it was primarily technology that boosted shale production and not prices.

trickydick on Sat, 21st Mar 2015 12:35 pm 



Perhaps when oil reaches $70, that will be a good time to short it.

Perk Earl on Sat, 21st Mar 2015 12:36 pm 



Well here’s another possible nail in the coffin of oil prices rising:

http://www.zerohedge.com/news/2015-03-20/just-global-oil-glut-deepens-china-cuts-oil-imports

‘Just as Global Oil Glut Deepens, China Cuts Oil Imports’

“I don’t think there is much space left to fill,” a Chinese storage executive told Reuters under the condition of anonymity. He said that in the Zhoushan area of Zhejiang province, where two SPR bases and major commercial storage facilities are located, tanks “are so full that one VLCC tanker owned by a state refiner has had to wait for almost 15 days to discharge.”

MSN Fanboy on Sat, 21st Mar 2015 12:48 pm 



Calm down Davy

MSN Fanboy on Sat, 21st Mar 2015 12:49 pm 



Calm down Davy

Davy on Sat, 21st Mar 2015 1:48 pm 



MSN, in the garden now planting strawberries and blackberries. That calm enough for you?

Perk Earl on Sat, 21st Mar 2015 2:29 pm 



“Peak oil is not exactly geological, although geology has a whole lot to do with it. Peak oil is actually reached when people can no longer afford what it costs to to produce it..,

Most people probably think that OPEC must be getting rich on its oil, but the reality is that ‘Oil prices are now too low for most OPEC countries to cover their spending needs.’ Peak oil is sneaky because it has the hidden effect of slowly impoverishing oil customers by inhibiting economic growth in addition to directly raising fuel costs.

The bottom line

We have already reached the point that the average cost to drill for oil is more than our world of oil-starved and economically struggling customers can afford to pay.” ~ Roger Baker

rockman on Sat, 21st Mar 2015 4:24 pm 



With regards to China: just a thought experiment. China certainly needs to still import some oil. But for at least 15 years the Chinese have been focused on the long term access to and acquisition of oil. They’ve acquired working interest in fields with long lived reserves and entered refinery JV’s with oil exporters such as the KSA which guarantees access to oil decades down the line.

So here’s a theory: by the Chinese talking down the immediate acquisition of oil and perhaps reducing imports a bit below current demand they’ll put downward pressure on oil producers/exporters. Especially those companies that have borrowed themselves into a deep hole. This could make acquisition of proven INGROUND RESERVES easier and cheaper. It could also provide better terms for upcoming JV’s.

Not entirely without precedence: after the oil price crash in late ’08 when companies pulled back China went on something of a buying spree. Focused on the long game they weren’t forced to deal with the quarter to quarter demands of public companies.

Just a random thought on a rainy Saturday afternoon.

Makati1 on Sat, 21st Mar 2015 7:05 pm 



No one can be sure of tomorrow’s oil price and certainly not next year’s or five years from now. Or of the quantity being recovered. That is why I quit reading articles pretending to know the future. My guess is as good as theirs. Maybe better as I don’t have a career or investment involved.

China and Russia both plan long term … not the next quarter. Both have a long history and deep cultures to draw on. Both know how to survive. Not so, the Empire. That is what makes the present so interesting and dangerous.

viewcrafters on Sun, 22nd Mar 2015 3:11 pm 



The price would rise sooner if they stop pumping fracked oil. Looks like they would rather deplete their fields.

viewcrafters