Just before T. Boone spoke on CNBC yesterday I made some comments on oil and was please to see he agreed.
He is still very bullish on oil noting that oil production is now 85 million barrels a day and there is a 88 million production goal for Q4, “so production is going up.” He also noted that as some fear oil could go to $100, but he doesn’t think that will happen this year and he thinks that would take a “cataclysmic” event.
He did say that in the very near term he thinks we should get a pullback here to maybe $78 a barrel but long term the trend is up as demand is up and production is flat. He said demand in second quarter of 2008 will fall, but he did not expect supply to increase. If the global economy stays “as robust” as it is now, he said $90 a barrel could be seen next year (10% higher than now). This essentially mirrors the sentiment I wrote about yesterday and does cement my decision to hold my USO position but to not expect much more out of in the short term.
One of his favorite stocks? Suncor (SU)
The interview can be seen here.