T Boone Pickes Says Saudis are Producing as Much as They Can

Oilman T. Boone Pickens said Thursday that Saudi production is topping out at about 10 million barrels per day and oil prices will return to $70 per barrel by the end of the year.

OPEC is “all in at 31 million barrels a day. That’s about all they can do,” Pickens said on CNBC’s “Squawk Box.” “They talk a lot about it, what they can do, and the Saudis say 12 and half. Well show me. I’m ready to see 12 and a half.They’re making 10.3, and they struggle at 10, I think. I think 10 is about all the Saudis can do.”

Oil Minister Ali al-Naimi said Saudi Arabia produced some 10.3 million bpd of crude in March, eclipsing a previous high of 10.2 million in August 2013.

The Organization of the Petroleum Exporting Countries is expected at a meeting on Friday to keep a group output target of 30 million bpd, a ceiling it has been exceeding for most of the last two years, weakening prices.

The cartel is now pumping about 2 million bpd more than needed, analyst say, feeding a glut that has left millions of barrels stored on tankers without a buyer and kept prices at close to half their peak levels last year.

Production declines in the United States will also support prices, Pickens said, noting that output has dropped off in North Dakota’s Bakken formation and Texas’s Eagle Ford play as drillers have taken about 1,000 rigs out of oilfields since December.

“Now, you shut down 1,000 rigs, we’re dealing with decline curve,” said Pickens, chairman of BP Capital Management. “If you’re trying to grow production, you’ve first got to maintain production.”

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza