US magnate warns oil prices could hit $100 by the end of 2016
Oil prices could return to as much as $100 a barrel by the end of next year, a US oil magnate warned yesterday.
"I think you could very well be at $100 a barrel by the end of 2016," Boone Pickens, chair of the hedge fund BP Capital, said during a speech at the Commonwealth Club of California in San Francisco.
Oil prices fell to $45 per barrel in mid-January, a 60 per cent decline from last year's peak of about $106 in June. This is due to the rise of the US shale gas industry, waning appetites of once ravenous emerging economies as well as the Organisation of Petroleum Exporting Countries' (OPEC) refusal to cut production.
They then staged a brief rally at the start of this year, but oversupply concerns slammed the brakes on this.
Low oil prices have been a boon for businesses and consumers, for whom they've acted like a tax break, reducing the cost of everyday goods such as heating and transport.
And in this sense, Pickens' warning actually has some silver lining, because he'd recently said they would reach that level a year earlier.
Other industry titans have warned under-investment, brought about by low oil prices making projects unprofitable, could actually cause oil prices to jump to $200 per barrel some time in the future.
