Tuesday, October 6, 2009

Pickens Says China Purchases Are Leading to $90 Oil (Update1)

Pickens Says China Purchases Are Leading to $90 Oil (Update1)

By Jim Polson

Oct. 6 (Bloomberg) -- Billionaire hedge-fund manager T. Boone Pickens said Chinese purchases will help push up crude-oil prices to as much as $90 a barrel next year as output declines and the global economy rebounds.

Next year’s average oil price will be $80 a barrel, 39 percent more than the average so far this year, Pickens said today in an interview on CNBC.

China has spent $200 billion on forward purchases, “tying up” the world’s oil supply, Pickens said. The U.S. “can’t compete” with China-owned oil companies because it lacks state- owned oil companies to pursue its economic interests, he said.

Crude will eventually reach $170 a barrel, 15 percent above the July 11, 2008, record, Pickens said, without giving a date. Oil discoveries announced this year off the coast of Africa and in the U.S. Gulf of Mexico won’t keep pace with annual global consumption of 30 billion barrels, he said.

“China has a plan,” Pickens said. “We don’t.”

Pickens called on Congress to pass legislation this year requiring that all new heavy trucks burn natural gas rather than diesel, a move he said would cut U.S. oil imports from OPEC, the Organization of Petroleum Exporting Countries, by half.

Pickens has invested in a company that supplies natural gas for trucks and buses.

Crude-oil futures rose 89 cents, or 1.3 percent, to $71.30 at 8:07 a.m. on the New York Mercantile Exchange. Natural-gas futures gained 4.8 cents, less than a percentage point, to $5.04 per million British thermal units, double this year’s low of $2.41 on Sept. 4.

To contact the reporters on this story: Jim Polson in New York at jpolson@bloomberg.net.

Last Updated: October 6, 2009 08:47 EDT


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