| BEVERLY HILLS, Calif. April 24
BEVERLY HILLS, Calif. April 24 Legendary oilman
T. Boone Pickens said on Tuesday that global demand will
outstrip supply in the fourth quarter of this year, leading
U.S. oil prices to rise to $80 or more a barrel.
Pickens would not predict how high beyond $80 oil would go
this year or in 2008, but said he was interested to see how
long $80 oil will need to be sustained to lessen demand.
"This year we'll go back at the $78," Pickens told Reuters
on the sidelines of The Milken Institute Global Conference at
the Beverly Hills Hilton. "And you'll see $80. When you're at
$78, you're right at $80. How high will it go beyond $80? I
"I don't know where it has to go to kill demand. If it just
pops up to $78 and beyond for a short time, demand may or may
not be affected."
Pickens, 79, began his career in the oil industry in 1951
as a geologist and now heads BP Capital, a $4 billion hedge
fund that made $1 billion last year.
He picks $78 because oil hit a record high just over that
level last July when tensions began between Hezbollah and
Israel in Lebanon.
"At some point prices will begin to kill demand," said
Pickens. "The only way to kill demand is price."
Reminded that $78 oil did not significantly lower demand
last summer, Pickens said that was because it did not stay
there long enough to test if that was a demand-killing price.
Pickens also would not be pressed to say how long plus-$78
oil needs to be sustained before demand is lowered.
"What's going to happen is the supply will get very
critical in the fourth quarter this year," Pickens said.
"Demand will be above supply and we'll see what happens."
Pickens said he has predicted $100-a-barrel oil and he
still thinks oil will reach that level, but he would not say
"We'll all see $100 in the future," Pickens said.
"Everybody says that. You're going to have to conserve at some
point. At what price will that conservation really kick in?
Again, I don't know."
Crude oil for June CLc1 delivery on Tuesday settled at
$64.58 a barrel.
Pickens at the Milken conference debated Forbes publisher
and former U.S. presidential candidate Steve Forbes on energy
policies and the future of oil.
Pickens said the "true price" for oil is the price that is
determined by the market.
Forbes blamed money supply growth for near-record high oil
prices, citing policies by central banks, led by the U.S.
The true price of oil is between $40-$45 per barrel, Forbes