Tycoon Pickens Cashes Out on Oil, Awaits Time to Get Back In

Boone Pickens: Watch Out for Recession
  • Pickens won't re-enter market until inventory starts shrinking
  • Pioneer, Anadarko, Apache could be M&A targets, Pickens says

Oil tycoon T. Boone Pickens, who made and lost fortunes targeting some of the largest U.S. explorers over the past 40 years, has cashed out as the worst crude market downturn in decades drags on.

Pickens has sold all his oil holdings and is waiting for the best moment to get back in, he said Thursday in an interview on “Bloomberg Go.” With prices low, mid-size U.S. oil companies such as Pioneer Natural Resources Co., Anadarko Petroleum Corp. and Apache Corp. are acquisition targets for larger firms like Exxon Mobil Corp., he said.

Crude prices have slumped 70 percent since June 2014, leading the oil industry to eliminate more than 250,000 jobs and slash over $100 billion in spending in the last year, with more cuts expected this year. The reductions should lead to a drop in oil production, which would boost oil prices back to the $50-$60 range by the end of the year as long as the economy doesn’t enter a recession, Pickens said.

“The low is in,” he said. “Just don’t get in a rush here. You’re going to have plenty of opportunity. The market is going to be volatile. it’s not going to go straight up, so there will be good entry points.”

West Texas Intermediate has rebounded 22 percent since touching a 12-year low of $26.19 a barrel on Jan. 20.

Pickens started reversing course in the third quarter by slimming down his energy holdings and selling several stocks he’d bought just three months earlier, according to data compiled by Bloomberg.

Pickens won’t start investing again until crude inventories start to fall. In the U.S., commercial stockpiles have risen in 16 of the past 19 weeks and now stand at more than 500 million barrels for the first time since 1930, at the height of the East Texas oil boom.

“I will not re-enter, I’m sure, until we start to draw on inventories,” Pickens said. “That’s a key point.”

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