Oil Prices Could Hit $70.00 Per Barrel, Says T. Boone Pickens
Collapsing U.S. energy production could spark shortages, sending oil prices as high as $70.00 per barrel early next year. At least, that’s the latest oil price forecast from famed energy investor T. Boone Pickens.
The one commodity with the most international economic and political influence is unarguably the “black gold.” Down to its 10-year lows, it doesn’t seem like the worst days for oil are over yet. Lower oil prices caused many energy investments to slump, ultimately dragging down the S&P 500 and Dow Jones Industrial Average indices. The last month, however, boded well for oil, with the black gold rebounding from a high $30.00-rage to a high $40.00-range this week. Will the momentum continue? It’s doubtful.
T. Boone Pickens appeared on CNBC earlier this week to reiterate his take on oil. He had earlier predicted oil prices to revert back to $70.00 a barrel by the end of this year. He maintains his stance on price reversion but doubts it will go back up to that range in 2015. (Source: The problem with my $70 oil call, CNBC, October 8, 2015.)
It appears that not only are the OPEC countries looking for ways to increase their market share against key players U.S. and Russia, but that there is an internal ongoing competition within the OPEC countries. Kuwait and Iran have been the two OPEC countries that aggressively cut rates last month to increase their market share against the biggest supplier of oil, Saudi Arabia.
Last year, Saudi Arabia triggered a price war within the OPEC countries to gain control of the oil market in the region. The move, ostensibly, had geopolitical implications: to destabilize Iran and Russia backing rival Bashar al Assad in Syria, and to gain strategic ground in the Middle East oil and gas pipelines war, the Iran-Iraq-Syria pipeline being one of them. Now that the sanctions on Iran are about to be lifted in the coming year Iran is moving fast to find its way back into the international market.
Pickens speaks on the matter, saying Iran and Iraq will soon become major constants in the oil equation.
You can read T. Boone Picken’s full commentary here.