Tightening oil production worldwide could mean prices hitting $148 per barrel this summer, Texas billionaire investor T. Boone Pickens said Tuesday.
Not even spare capacity from Saudi Arabia would be enough to make up the difference amid increasing sanctions against Iranian oil, Pickens said in an interview on “The Kudlow Report.”
“It’s tight now. That’s why you have Brent North Sea $126 and you’ve got WTI at $105,” he said. “Global supply is tight. No, I don’t think they can can cover. If they do, they’ll cover it out of storage.”
Brent crude traded at $124.85 and WTI traded at $103.98.
Asked by host Larry Kudlow how much U.S. consumers could see prices rise, Pickens issued a dire proclamation.
“I don’t know how much is up. I think you can very well see the old high — $148,” he said. “I’m not saying WTI — our price here in the United States — will go up to $148. It’s been very stable around $100.”
Pickens said the United States continued to enjoy some of the lowest energy costs in the world.
“We have the cheapest oil by 20 percent, and we have the cheapest natural gas by 80 percent, and we have gasoline at $4, Europe at $9. So, I don’t understand why people are complaining,” he said.
(Last week, other experts said oil could hit $200 per barrel.)
In a previous CNBC interview, Pickens, CEO of BP Capital Management and a major shareholder in Clean Energy Fuels, said he believed the motivation was there for the United States to move away from OPEC oil, just as it had done in the 1970s.
“OK, go back to ’72 when we switched from gasoline to diesel for our heavy-duty trucks. Well, what was that all about? Price. Diesel was cheap. How long did it take to accomplish it? Five years.
“You’re exactly at the same crossroads today,” he said. “I don’t see any obstacles in front of it.”
On Tuesday, Pickens said he was surprised a federal bill failed that would have provided subsidies to help convert commercial truck fleets to natural gas, which has been getting cheaper in recent months.
But he was confident that companies such as Navistar and Cummins would continue to advance the technology — and that companies such as FedEx would make the switch to the cheaper fuel.
“They’re all looking at it,” he said. “They’re all going to do it.”
"The Kudlow Report" airs weeknights at 7 p.m. ET.
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