KRLD's David Johnson, left, interviewed T. Boone Pickens in Dallas. (File photo by Jeanne Prejean)

Pickens: Oil to Hit $90 Again, But Not Before Some Pain in Texas

Lower prices caused by oversupply due to fracking and horizontal drilling, energy mogul says.

Here’s an explanation by T. Boone Pickens of the current crude-oil situation, in four sentences: Prices are down from their $100-plus highs not because of OPEC but because, thanks to advances in fracking and horizontal drilling, the U.S. has oversupplied the market. However, the price will bounce back from below $50 per barrel into the $90-$100 range again in 12 to 18 months. The reason: excess oil inventories will hit all-time highs in 2015’s first quarter, leading many of the country’s 1,500 oil-drilling rigs to shut down. That in turn will crimp production, spurring the price turnaround by the third quarter.

While “the guy on the street doesn’t give a damn about the oil industry,” the average person is happy that gasoline prices have dropped, Pickens said. But he added: many people will give a damn about the industry in Texas, where it’s been a jobs and spending generator. The temporary downturn will hit the Houston and San Antonio economies a lot harder than those in Dallas and Austin, he believes, and Midland will really feel it: “It will take two barbers to shave a guy, because they’ve got some pretty long faces out there. But, they’ll be back in a year and a half.” The energy mogul made the comments in Dallas yesterday during an interview by David Johnson of KRLD 1080 FM for the YTexas CEO Spotlight Series.

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