Commodities
Pickens: Oil May Fall to $100 in Next 2 Years
Chuck Marvin
07/08/08 - 03:43 PM EDT
T. Boone Pickens, the legendary wildcatter turned takeover artist who now commands the hedge fund B.P. Capital Partners, said in a Tuesday television interview that oil prices will likely stay around $150 a barrel for the foreseeable future.
However, Pickens told CNBC that crude could fall back to $100 a barrel in the next two years as consumption patterns adjust to exorbitant prices.
Earlier in the day, Pickens hosted a meeting with reporters in which he introduced his version of a new energy plan aimed at reducing U.S. dependence on foreign oil. The plan proposes that gasoline-powered auto engines be converted to run on natural gas. Additionally, Pickens says the existing power-generation system that currently runs on natural gas and old coal technology should be replaced with a new system powered largely by wind and solar power.
In such a program, the U.S.'s reliance on foreign sources of energy essentially would be replaced by new energy sources that are plentiful and relatively inexpensive to produce domestically, according to Pickens.
Conveniently, the program focuses on technologies that Pickens is heavily invested in. He is now planning to construct a wind farm in Texas that would be the largest in the U.S., with 2,500 wind turbines generating enough electricity to power 1.3 million homes. Some of the turbines have already been ordered from GE (GE Quote - Cramer on GE - Stock Picks).
In past months, energy traders have harnessed the hype surrounding public forecasts of high oil prices by Pickens and financial institutions such as Goldman Sachs to send oil futures higher. Oil bulls were unable to replicate this in Tuesday's trading session at the New York Mercantile Exchange; West Texas crude earlier fell more than $5 a barrel to under $137.