Legendary energy investor T. Boone Pickens predicts that oil prices should double within 12 months.
The BP Capital Chairman and CEO told CNBC that oil prices will rise to at least $52 per barrel by the end of the year.
"We're still building inventories, and we will for the next several months. And then we'll start to draw," Pickens said. "Once you start to draw, you're not going to start back building again. The draw will come here in the next few months. It'll become pretty clear," he said.
"We're [only] on 1 million to 1.5 million [barrels per day] oversupplied in the market," he added, pointing to the glut in the mid-1980s that he said was 15 million barrels per day oversupplied.
Late last year, Pickens reversed course in the third quarter by slimming down his energy holdings and selling several stocks he’d bought just three months earlier as the worst crude market downturn in decades drags on longer than he expected.
The value of energy stocks held by his Dallas-based TBP Investments Management LLC fell by more than half in the quarter to $35.6 million, according to data compiled by Bloomberg. TBP exited stakes in 13 companies, including smaller oilfield contractors Pioneer Energy Services Corp., C&J Energy Services Ltd. and Patterson-UTI Energy Inc. Many of the positions Pickens sold were stakes he had bought in the second quarter.
TBP also sold off smaller positions in exploration companies Apache Corp., and Occidental Petroleum Corp. By exiting Apache in the third quarter, Pickens missed out on the company’s recent improvement, as the Houston-based producer has climbed 27 percent since Oct. 1. Much of the surge came on news last week that it had been approached by a buyer.
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The BP Capital Chairman and CEO told CNBC that oil prices will rise to at least $52 per barrel by the end of the year.
"We're still building inventories, and we will for the next several months. And then we'll start to draw," Pickens said. "Once you start to draw, you're not going to start back building again. The draw will come here in the next few months. It'll become pretty clear," he said.
"We're [only] on 1 million to 1.5 million [barrels per day] oversupplied in the market," he added, pointing to the glut in the mid-1980s that he said was 15 million barrels per day oversupplied.
Late last year, Pickens reversed course in the third quarter by slimming down his energy holdings and selling several stocks he’d bought just three months earlier as the worst crude market downturn in decades drags on longer than he expected.
The value of energy stocks held by his Dallas-based TBP Investments Management LLC fell by more than half in the quarter to $35.6 million, according to data compiled by Bloomberg. TBP exited stakes in 13 companies, including smaller oilfield contractors Pioneer Energy Services Corp., C&J Energy Services Ltd. and Patterson-UTI Energy Inc. Many of the positions Pickens sold were stakes he had bought in the second quarter.
TBP also sold off smaller positions in exploration companies Apache Corp., and Occidental Petroleum Corp. By exiting Apache in the third quarter, Pickens missed out on the company’s recent improvement, as the Houston-based producer has climbed 27 percent since Oct. 1. Much of the surge came on news last week that it had been approached by a buyer.
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Meanwhile, U.S. crude oil prices fell 6 percent on Monday as weak economic data from China, the world's largest energy consumer, reversed a four-day rally from last week and an OPEC source undermined chances of an emergency meeting to stem the decline.
China's manufacturing sector contracted at the fastest pace since 2012 in January, adding to worries about demand from the world's second-biggest economy at a time when the market is already weighed down by a large supply overhang.
"China is the last standing consumer of oil outside of the U.S.. The problem is that everyone is relying on them," Carl Larry, director of business development at Frost & Sullivan in Houston, told Reuters.
"As long as we keep in this scenario where China is the only real consumer to pick up the pace, we're going to see moves lower every time China has an issue with their economy."
Brent April crude futureswere down $1.64, or 4.6 percent, at $34.35 a barrel by 12:09 p.m. EST. U.S. benchmark West Texas Intermediate (WTI) fell $1.99, or 5.9 percent, to $31.63.
China's manufacturing sector contracted at the fastest pace since 2012 in January, adding to worries about demand from the world's second-biggest economy at a time when the market is already weighed down by a large supply overhang.
"China is the last standing consumer of oil outside of the U.S.. The problem is that everyone is relying on them," Carl Larry, director of business development at Frost & Sullivan in Houston, told Reuters.
"As long as we keep in this scenario where China is the only real consumer to pick up the pace, we're going to see moves lower every time China has an issue with their economy."
Brent April crude futureswere down $1.64, or 4.6 percent, at $34.35 a barrel by 12:09 p.m. EST. U.S. benchmark West Texas Intermediate (WTI) fell $1.99, or 5.9 percent, to $31.63.
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