Even though oil prices continued their free-fall Wednesday, Texas energy investor Boone Pickens said he expects prices to rebound, and average $70 a barrel over the course of this year.
In an appearance on CNBC, Pickens confirmed his hedge fund firm, BP Capital, has seen its equity fund lose 6% of its value in 2007. The size of the loss had been reported by The Wall Street Journal, which said the fund comprises $2 billion and has a 10% allocation to oil and natural gas futures.
However, Pickens said, he remains bullish about his fund's prospects, and he is hesitant to reset the portfolio.
"I think we still have the fundamentals right," he said. "Weather has been no help, but you can't win these things on weather....I think we are going to see a turn around here."
Crude oil prices have plunged more than 35% since a record peak of $78.40 last July. Earlier today, prices sunk to a new 20-month low of $50.28 a barrel, as comments by Saudi Arabia's oil minister encouraged further selling.
"I'm not surprised at the pullback because we have had no winter," Pickens said, on CNBC's "Squawk Box." "The depth of the pullback has been a surprise to me," he said.
Pickens continues to expect that the market won't let oil prices sink below $48 a barrel.
In addition, he said he suspects Saudi Arabia has already reduced its oil production by 250,000 barrels of oil a day within the last 30 days in an effort to balance world supplies of the commodity.
Still, other oil analysts said they wouldn't be surprised if oil prices tumble further.
Mark Gilman, an oil analyst at Benchmark, expects prices could drop to $40 a barrel or "perhaps even lower."
On CNBC's "Morning Call," Gilman said investors should take "very defensive" positions in the energy sector.
"We are looking at earnings that are likely to be 20% to 25% lower than the consensus for our universe," Gilman said. The stocks he covers run the gamut from refiners to integrated oil companies such as Exxon Mobil .
Jacques Rousseau, a senior energy analyst at FBR, also expects some tough times ahead for energy stocks.
"The stocks have definately felt some of the pain, and I think we have a few more weeks of negative sentiment in energy," Rousseau said. He cited the potential for rising oil inventories and for negative reserve replacement data as factors behind the negative sentiment.
In an interview on "Morning Call," James Newsome, the chief executive of the New York Mercantile Exchange, said hedge funds and other big speculators are "trend traders" and have added to the steep drop in oil prices, but he said he isn't worried about a crash in the market.
"The market is continuing to move on the fundamentals of supply and demand," Newsome said.