Few people enjoy a better understanding of global geopolitics than former White House Deputy Chief of Staff Karl Rove. Last week, he and I chatted about the energy revolution the world is currently witnessing. Here are my five takeaways:
American ingenuity has changed the world.
If you think the Saudis are happy about $30 oil, then think again. Hydraulic fracturing and horizontal drilling are why you and I are paying $2 a gallon at the pump. These two innovations have transformed the United States into an energy superpower. In the process, they have also upended global energy markets.
American ingenuity has also revitalized our economy.
Cheaper, cleaner natural gas is stoking our country’s manufacturing sector. For the first time in decades, U.S. manufacturers are once again competitive against low-cost foreign rivals. One of the big questions for candidates in this year’s presidential race will be what their plan is to maintain this all-important momentum.
Energy independence is within our grasp.
Just a decade ago, the United States was about to run out of natural gas. Thanks to America’s energy revolution, however, we have a surplus of gas – and oil. We need to capitalize on this TODAY.
Now is the time to end our dependence on Middle Eastern oil.
OPEC only likes us when we’re paying too much for their oil. Right now is our best opportunity to end our dangerous addiction to Middle Eastern oil. The only question is whether or not one of the candidates running for the presidency is willing to take a stand.
Speaking of the presidency, let’s look back to look forward.
If you want to get a better understanding of presidential politics (and who doesn’t right now?), then pick up a copy of The Triumph of William McKinley: Why the Election of 1896 Still Matters. Karl’s latest book labels this contest as the first truly modern campaign. There’s a lot to be learned in this fascinating read.
Download the podcast on AudioBoom or iTunes.
BP Capital Founder T. Boone Pickens discusses the U.S. economy, risk of recession and the price and production of oil. He speaks on “Bloomberg ‹GO›.” (Source: Bloomberg)
By Matthew J. Belvedere
Oilman Boone Pickens said Monday U.S. crude hit bottom at just above $26 per barrel, and based on history, prices should double within 12 months.
Pickens predicted on CNBC’s “Squawk Box” that oil prices will rise to at least $52 per barrel by the end of the year, though he reiterated his admission that he got last year’s call wrong when he thought prices would strongly rebound.
Whether it’s $50 or $70 by the end of 2016 will largely be determined by the global economy, he added.
West Texas Intermediate crude, the U.S. benchmark, was under pressure again Monday — losing around 3 percent mid-morning and trading below $33 per barrel.
“We’re still building inventories, and we will for the next several months. And then we’ll start to draw,” Pickens said. “Once you start to draw, you’re not going to start back building again. The draw will come here in the next few months. It’ll become pretty clear.”
“We’re [only] on 1 million to 1.5 million [barrels per day] oversupplied in the market,” he added, pointing to the glut in the mid-1980s that he said was 15 million barrels per day oversupplied.
In a CNBC commentary in October, Pickens conceded his prediction for $70 oil by the end of 2015 wasn’t going to happen, because worldwide demand did not go up as much as he thought and supply did not markedly go down.
On the final trading day of last year, WTI settled at around $37 per barrel.
As crude accelerated to the downside in 2016, Pickens told CNBC’s “Mad Money” on Jan. 6 that oil was close to its floor, and predicted $70 to $75 prices by year end. The low for the year on WTI was $26.55 per barrel on Jan. 20.
With more than a half century in the oil and gas business, Pickens spent most of his career building Mesa Petroleum into a powerhouse. After selling Mesa in 1996, he founded BP Capital Management, an investment firm focusing on the energy industry.
Read this article on cnbc.com.