T. Boone Pickens, the billionaire chairman of BP Capital LLC, talked about the impact of turmoil in the Middle East on oil prices and the need for new U.S. energy policy on Bloomberg Television's Surveillance Midday. He said that the world's spare capacity was shrinking to worrying levels that would give OPEC little ability to quickly meet demand, meaning that prices would have to climb high enough to stop people using more oil:
You've got a similar situation to 2008, with extra supplies available in this market possibly less than 1 million barrels (per day) now. The Mideast is in real turmoil. It's on fire. The price can go anywhere. You're gonna see oil go up from here, and how high up I can't tell you, but if it went to 120, if it went to 150, that could all happen.
Pickens believes that the problem is ourselves, not the Middle East or Canada, and he wants President Obama to develop an energy plan:
Wait a minute, blame ourselves! We're the problem. Those people are just selling oil. We've gone 40 years and never had an energy plan. We're the largest user of oil in the world. We use almost 25% of all the oil used every day with 4% of population and we have no energy plan. Let's focus on ourselves. We're the problem.
Pickens is extremely bullish about the following stocks, giving them the highest weight in his portfolio:
Company | Ticker | Value (Million) |
CHESAPEAKE ENERGY CORP | 23 | |
BP PLC | 23 | |
MCMORAN EXPLORATION CO | 20 | |
WEATHERFORD INTERNATIONAL LT | 20 | |
PLAINS EXPL& PRODTN CO | 19 | |
QEP RES INC | 17 | |
EOG RES INC | 16 | |
SANDRIDGE ENERGY INC | 14 | |
SUNCOR ENERGY INC NEW | 14 | |
NOBLE CORPORATION BAAR | 12 | |
DEVON ENERGY CORP NEW | 12 | |
NATIONAL OILWELL VARCO INC | 11 | |
OCEANEERING INTL INC | 11 | |
HALLIBURTON CO | 11 | |
DAWSON GEOPHYSICAL CO | 8 |
Pickens added 140,000 shares of CHK during the fourth quarter, making it the largest position in his portfolio. That was a very shrewd move: CHK has gained 34% so far in 2011. His second largest position, which he added during the third quarter, is British Petroleum. John Griffin’s Blue Ridge Capital, John Burbank’s Passport Capital, David Einhorn’s Greenlight Capital, and Whitney Tilson’s T2 Partners also have large BP bets.
His fourth-largest position, Weatherford International, is favored by Dan Loeb’s Third Point and Barry Rosenstein’s Jana Partners. His fifth largest position, PXP, is liked by billionaires George Soros and Leon Cooperman.
Disclosure: I am long CHK.
