Oil and Gas

Boone Pickens: Why I’m standing by $70 oil by year end

Pickens: Oil headed to $70
Pickens: Oil headed to $70

Despite the recent volatility in crude, energy entrepreneur Boone Pickens is sticking to his prediction that oil will hit $70 a barrel by the end of the year.

In an interview with CNBC's "Power Lunch," Pickens said that he expects demand to grow while U.S. production slows down.

"If I miss on $70 it'll be because it's over $70, not under $70. That's how confident I am," the founder of BP Capital said. "I think demand will be over 2 million barrels a day."

U.S. crude futures jumped 2 percent Thursday, closing up $1.13 at $52.78 a barrel. On Wednesday, U.S. oil had its lowest settlement since April.

was last up $1.60 at $58.65 Thursday, after hitting an April low on Monday.

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Last week, oilfield services firm Baker Hughes reported U.S. rig count was up three rigs from the week prior to 862. However, the count is down 1,012 rigs from last year.

"As you go forward from here, declines will happen and U.S. production will go down," said Pickens, who noted he's long oil futures in the fourth quarter and out.

As for the threat of Iranian oil flooding the market once a deal on its nuclear program is reached, Pickens is unconcerned.

"Iranian oil won't come into market until next year, and when that happens you're going to need the oil," he pointed out.

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Currently, 93 million barrels a day of oil is produced globally, he said, with more than 9 million coming from the U.S. and 31 million coming from OPEC. That leaves about 50 million barrels of oil coming from other sources, including Russia, said Pickens, and he expects a 5 percent to 6 percent decline in that 50 million barrels.

Plus, despite Iran's claims that it can bring 1 million barrels of oil a day into the market, he believes that number is closer to 200,000.