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Pickens Predicts Oil to Top $100 by End of 2010

Discussion in 'Gen 2 Prius Main Forum' started by avocadoman1, Jan 7, 2009.

  1. avocadoman1

    avocadoman1 Member

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    Pickens Predicts Oil to Top $100 by End of 2010 - Oil and Gas * Energy * News * Story - CNBC.com

    Texas billionaire T. Boone Pickens said Tuesday that oil prices will rise above $100 a barrel by the end of 2010 as the global economy recovers.

    Oil prices in the $40 a barrel range are "not going to be around much longer," Pickens told a gathering at the James A. Baker III Institute for Public Policy at Rice University in Houston.
    Oil prices have tumbled from over $147 a barrel in July to about $48 a barrel Tuesday as demand in the United States and other developed countries slows due to the global economic
    crisis.
    By late 2010, Pickens sees a rebound in oil demand sparked by a global recovery, pushing prices higher.
    If the U.S. continues to rely on imported oil for 70 percent or more of its supply, prices could reach $200-$300 per barrel in another decade, Pickens said.
    As an investor, Pickens said he remains "on the sidelines," with just 10 percent of his BP Capital hedge fund invested in energy. The fund lost $2 billion last year before shifting to cash as energy prices and stocks declined.
    The recent drop in oil and natural gas prices has not derailed Pickens' effort to push the next administration to implement an energy plan to reduce U.S. dependence on foreign oil.
     
  2. malorn

    malorn Senior Member

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    Boone says speculators have nothing to do with it. Hmmmmmmmmmmmm.
     
  3. hill

    hill High Fiber Member

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  4. malorn

    malorn Senior Member

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    Show me all the "experts"? Remember ol' boone is also selling a product which will benefit greatly form oil at $100+/barrel. Show me which "expert" predicted that last July was saying oil would be trading @ $33/barrel on Jan 1st and I will agree that he/she is an "expert". That list certainly would not include Boone Pickens.

    If retail does not pick up soon oil won't approach $100/barrel for the next decade.
     
  5. jayman

    jayman Senior Member

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    The time to plan for energy self-sufficiency is RIGHT NOW before we get caught with our briefs down around our ankles

    If you know what I mean?
     
  6. nerfer

    nerfer A young senior member

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    That's a little misleading, it's interesting how they say things like that, to make it sound like prices are still in a decline. Really it tumbled from $147 barrel to about $35 a barrel around Christmas. That was clearly unsustainable and prices are moving back upwards, currently closing in on $50/barrel.

    This might be a short-term bump and we may well go a little lower again in the short term, but I'm pretty sure we've seen the bottom. Too many wells aren't profitable below $45/barrel, supply will drop until prices recover. They're apparently already having layoffs in the Canada tar sands (needs prices above $60/barrel at least to be profitable). And trouble in the middle east doesn't help prices either. At least we're not relying on Russian natural gas right now...note to self: do not ever rely on energy from unstable or unfriendly countries.
     
  7. nerfer

    nerfer A young senior member

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    Pickens made his money predicting the future of oil, and given that he's worth a few billion, I think he qualifies as an expert. Most everybody was in agreement, the only way prices would drop below $70/barrel would be if we entered a recession. How many economic experts in July were predicting the Dow Jones would be at 7400 by Thanksgiving?

    I don't think anybody expected that much of a drop, but the sub-$40 range was pretty short-lived. Just like there was some speculation on the top side last summer (real value of oil was maybe $100-$120/barrel given supply and demand at the time, not $147), I think there was speculation on the over-supply in late December. Not enough people can supply oil at $33/barrel for that to come close to sustaining even recession-level demand.

    Oil took a big tumble today, back down to $43/barrel. If I was in the market, I'd be buying at that price.
     
  8. malorn

    malorn Senior Member

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    So why are they "experts"? To me an expert is someone who knows how things work in the big picture and gives people some idea of what the future may hold. Personally I know how far off most of these same "experts" were when it came to the business models of GM and Ford, their ideas of Detroit were rooted in the Detroit of the 70's and 80's.
    Getting back to economic and energy predictions made during the summer, do these experts have NO idea about "macroeconomics" and how the economy really works? I am beginning to think that is the case and worse for all of us these same "experts" have been dictating US economic and foreign policy for the last couple of decades. I guess that would help explain the mess we find ourselves in.

    Merriam-Webster: expert-one with the special skill or knowledge representing mastery of a particular subject .
     
  9. nerfer

    nerfer A young senior member

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    Well, you've got a point. I was trying to say that the oil experts are not economic experts so the degree of the downturn took them by surprise. They were only saying, if the economy does X, then oil will do Y, and never really planned for X^2. But the scale of the economic downturn surprised a lot of people, the so-called economic experts included. Of course there were the outsiders saying the sky will fall, but nobody listens to them because that's what they always say.

    Some of the problem with predicting macroeconomics is that a good portion of it is based on emotion. Consumer sentiment, housing and car markets, stock prices. You have to predict people's behavior as much as be able to understand the numbers and trends. But you are right, the experts didn't call this one very good at all.

    But as far as Detroit goes, people have been saying for years they have problems. Their labor and retirement expenses are too high, and as soon expensive gas started appearing on the screen (starting with Hurricane Katrina in 2005, but really starting in 2006 with $3/gallon gas), pundits have said they need to have some good small cars to compete with the Korean and Japanese imports. I don't think many people's opinion of the state of the Big 3 has changed much in the last 6 months, except now we have better numbers on the scope of the problem. (And good news for you, GM has retaken the lead from Toyota for the U.S. market, right?)
     
  10. Celtic Blue

    Celtic Blue New Member

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    Recently with oil near a recent bottom you said, "Oil will be under $20/barrel before the end of Feb." while laughing about the $200/bbl estimate. My guess is that the analyst who suggested $200 bbl will end up closer to the mark percentage-wise (since it hit $147) than you will with $20/bbl. Then who will look the more wise and who will look more foolish? :D

    Only a Depression outstripping the one in the 30's would do that. (This is sort of like betting that the Trinity test would ignite the atmosphere and destroy the planet. If you win, nobody will care anymore or be around to payoff.)

    Oil is still far higher than folks like you were projecting 5-6 years ago...but is in the range I projected. ;) I won't make projections about mins and maxes on something where small differences in demand can drive huge price changes. But it is not hard to make a projection that demand will outpace production over the long haul on this depleting commodity. Therefore the average price will outpace the inflation of other commodities.

    Short term runs up or down mean little by themselves. However, the wild swings almost guarrantee GREATER problems and higher prices in the long term. Why? Because they discourage long term investment in both oil production and in alternatives. Businesses can't make good economic decisions in such conditions, and neither can govts. or individuals. Swings wipe out investment on one end then the other. It's a lose-lose, but not unexpected for a commodity with extreme inelasticity. At present folks' projects have to contend with oil being anywhere from $33 to $147/bbl. Doesn't matter which side you are rooting for, this discourages investment.

    The answer of course is to work toward making the price of oil superfluous. You win by not playing the game. :cool:
     
  11. malorn

    malorn Senior Member

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    That is what I mean. You seem like an intelligent, well informed person and yet somehow you are under the impression that toyota outsells GM in the United States. For the record toyota has never outsold GM in the United States and in 2007 GM still outsold toyota 3.8 million vs 2.6 million, a very healthy margin. Toyota outsells GM in only one of the top 10 markets in the world.........Japan. I know you will find those facts hard to believe after watching some of the automotive "experts" spout off on the television or reading Tom Friedman in the NYT, but those are the facts. Surprised?
     
  12. Codyroo

    Codyroo Senior Member

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    Was it Boone Pickens (or someone else) who had invested 100's of millions of the family fortune in oil back in the 90's (I believe) and jumped out of the market when oil hit ~ $120/barrel? The article I was reading (over the summer) quoted the person as saying that he felt he was near the top (not at the top) and sold off. He said he'd "reload" when he felt oil was ready to move again. After this person sold, oil moved towards $140 a barrel, then came retreating down to current levels.

    Was that Boone Pickens?
     
  13. Fibb222

    Fibb222 New Member

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    Very well said. Not said anywhere near enough, although, thank goodness I heard that Obama said something similar.
     
  14. Fibb222

    Fibb222 New Member

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    That's what I don't get. GM has a larger market share than Toyota in many markets including the USA and they have lost tens of billions of dollars over several years. Must be complete business mismanagement at an extreme level - year in, year out.
     
  15. qbee42

    qbee42 My other car is a boat

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    We have had our briefs around our ankles for decades. Now all we are doing is trying to get the oil and gas people to use a little KY Jelly to ease the pain.

    Tom
     
  16. malorn

    malorn Senior Member

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    Retirees and healthe care. GM is the largest private provider of health insurance in the world and has almost 1 million retiress it has been supporting. These fixed costs were set up when GM had 50% of the US market, if that was still the case or even 40%, GM would have made money like exxon the last decade.
     
  17. PriusSport

    PriusSport senior member

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    Pickens is no dummy. I've heard him talk, and he knows about energy. Clearly, it's a no-brainer to be invested in energy right now--you could say there is some growth potential there. I would not be on the sidelines. Just buy and hold some energy mutual funds. Prices are low right now.

    Oil will certainly climb in price soon, as investors gather enough cash to pump up the oil futures price along with the stock market. What dropped the market for stocks and oil, I believe, was the flight to cash by investors who lost their shirts in financials and had to raise cash. Just follow the money.
     
  18. malorn

    malorn Senior Member

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    There was also a specualtion loophole that was closed. People buying oil have to have some ability to take delivery.
     
  19. andyprius

    andyprius Senior Member

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    T.Boone is wrong, oil will go up faster and higher than that. He was being conservative. Unless the world economy totally tanks! Now is a great opportunity to seek other Energy solutions and although I didn't vote for Obama, I wish him success. As far as "Experts", I don't think there are any, when it comes to the economy. They do not understand what happened, what is happening or what's going to happen. However while they have the center stage, they will keep mouthing off. Altho very well informed and willing to step up and do something, T.Boone may be the most reliable source of information. Money and profits do not dictate his actions at this stage of the game, I believe he is truly dedicated to his wind, solar and natural gas solutions. He is doing something!
     
  20. Fibb222

    Fibb222 New Member

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    I hope you're not including Canadians in that total of retirees GM's supporting with healthcare. extended medical/drug plan maybe. If GM lasts another ten years, will a large number of the retirees have passed on by then?