Oil bull Boone Pickens told CNBC this week that the oil market has finally hit its bottom for this cycle and WTI crude prices should recover to at least $52/bbl by the end of 2016. Pickens, the founder of energy-focused BP Capital Management, said that oil's recent dip to just above $26/bbl is the lowest that prices will go during the current downturn.
“Once you start to draw, you’re not going to start back building again. The draw will come here in the next few months,” Pickens explained.
Related Link: Barclays A Bear On Oil: Sees $37bbl At Most This Year
Pickens pointed out that the current oil market is only 1.0-1.5 million bpd oversupplied, which is minimal compared to the 15 million bpd oversupply during the peak of the 1980's decline.
As recently as January 6, Pickens had predicted oil prices would finish 2016 at or above $70/bbl. Pickens originally made a similar prediction for year-end 2015 oil prices of at least $70 per barrel as well.
The United States Oil Fund LP (ETF) USO is off to another horrendous start to 2016, already down 17.4 percent year-to-date.
Disclosure: the author holds no position in the stocks mentioned.
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