Oil will continue to trend higher after hitting fresh highs over $82 a barrel but is unlikely to puncture the $100 level this year, Texas oilman and investor T. Boone Pickens said on Wednesday.
“You’ll hit $100 — I don’t think you’ll hit $100 this year unless you have some kind of geopolitical event that causes that to happen, but you’re going to get to $100 at some point,” Pickens told Reuters in New York.
Concerns that supplies will struggle to keep up with demand as the Northern Hemisphere gears up for winter pushed U.S. crude oil futures to a record $82.51 a barrel on Wednesday, prompting forecasts it could rise to $100.
“The trend is up, and if your supplies are 85 million barrels per day (bpd) globally, and you look at what demand is predicted to be for the fourth quarter, it is 88 million bpd,” Pickens said.
“It means probably demand is greater than supply and the price goes up further.”
Pickens said that while oil will eventually reach triple digit levels, it was unlikely to spike to $100 this year unless an unforeseen event upsets fundamentals.
Pickens, who heads the heads the BP Capital hedge fund, which was valued at $4 billion earlier this year, said prices could be pressured if demand shows signs of wavering.
“We haven’t been at this level, so I don’t have a feel for when we start killing demand with price,” he said, adding oil could fall back to $78 a barrel before rising further.
In April when prices were around $65 a barrel, the legendary oilman forecast oil prices could tip $80 in late 2007 due to supply constraints.