August 20, 2008

T. Boone Pickens Comments on the War in Georgia

Over the last few days T. Boone Pickens has held meetings with both John McCain and Barack Obama.

Yesterday Mr. Pickens was interviewed by Neil Cavuto of Fox News about those talks. Here's what he had to say:

One point Mr. Pickens made near the start of the interview is worth repeating:

Now you have the Georgian situation with Russia, and no question about that being an energy issue too. There's a million barrels a day involved in that problem.

Neil then asked Boone Pickens some more questions about his discussions with the presidential candidates, and in particular:

You're more favorably disposed to Obama now?

Mr. Pickens denied that:

It's a total nonpartisan issue. It doesn't have anything to do with politics. This is about America, is what we're talking about. And when you have got both sides saying that this is not bipartisan, then you have got a real good chance at getting something done. I think both candidates, I'm hoping they will come out and say, before election, that they will reduce, in 10 years, the dependency on foreign oil by at least 30 percent, and that does not include any conservation. I want that from both of them.

Finally Neil returned to the war in Georgia and the recent fall in the price of crude oil:

Boone, final thought on what's been happening with oil. It has been going down very quickly, even in the face of this Russian-Georgian war, even under threat of storms in the Gulf, which, in the past, just the fear alone would add a few dollars to it. It's not happening now. Is this sort of like an Internet bubble unravelling or real estate unravelling? What do you make of it?

Boone Pickens replied that he thought oil prices would increase again:

No. You have still got 85 million barrels of oil produced every day in the world. And I don't think you can increase that. So, if prices go down, maybe a temporary oversupply. We have had a slowdown in our economy. Others, Europe slowing down, too, and that cuts off demand. And you have killed a lot of demand with price. When you got up to $4 a gallon, you started seeing demand go off.

And now the United States is down over a million barrels a day on demand. And we did that with price. You know, you and I have talked about this subject a lot. When you kill demand, if you don't have supply increase, the only way you can kill demand is by price. So, no, just wait. It will be back up again. This is a temporary dip.

Bear in mind that Boone Pickens does appear to know what he's talking about in these matters. BP Capital is still going strong, unlike the hedge funds and their parent companies at Amaranth and Bear Stearns.

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