Boone Pickens: Why I see $70 oil by year's end

Energy entrepreneur Boone Pickens said Thursday he sees $70-a-barrel oil by year's end, and between $80 and $90 within 12 to 18 months.

In an interview on CNBC "Squawk Box," Pickens said U.S. producers are in the process of rebalancing the market—pointing to the decline rig count in response to the continued collapse in crude prices.

But Pickens did dial down his longer-range forecast from December, when he predicted on "Squawk Box" $90 to $100 barrel in 12 to 18 months.

Last week, oilfield services company Baker Hughes said rigs seeking oil fell to 866. The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

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Pickens said U.S. producers in recent years ramped up too much, and overshot demand, which has led to the current price slide of about 50 percent since June.

Oil prices turned sharply lower again Thursday—dipping under $43 a barrel on U.S. crude—after Kuwait said OPEC had no choice but to keep production steady, refocusing the market on global oversupply.

Oil had surged Wednesday, after the dovish Fed comments.

Pickens also predicted $6 natural gas within five years. Nat gas was lower early Thursday, trading around $2.84.

Updating progress on the Pickens Plan—calling for trucks to run on nat gas—he said: "It's happening. But man, it's happening slow."

"The thing you can count on in natural gas, the price isn't going to run up on you, like it does on oil," said Pickens, who's been arguing for years that a switch to nat gas trucks could vastly reduce the nation's oil dependency.

With more than a half century in the oil and gas business, Pickens spent most of his career building Mesa Petroleum into a powerhouse. After selling Mesa in 1996, he founded BP Capital Management, an investment firm focusing on the energy industry.

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