Crude oil may rise to $80 in six months: Pickens

Crude oil prices will rise to $80 a barrel within six months, said billionaire T Boone Pickens, whose bullish bets on energy prices have earned him a place on the Forbes list of the richest Americans.

The oil price will continue to climb for the next two to three years, Pickens, chairman of the Dallas-based BP Capital LLC hedge fund, told reporters in Beijing.

The price of crude oil has risen 24 per cent this year, driven by higher demand and production cuts by the Organization of Petroleum Exporting Countries (Opec). Crude oil will likely return to its all-time high of $78.40 a barrel this year, Pickens predicted on April 24. Oil traded at $75.54 a barrel in New York today.

Pickens, who oversees more than $4 billion at BP Capital, predicted on July 5 2006 that crude would climb to $80 a barrel before the start of 2007. Oil futures touched $78.40 on July 14, the highest since trading began on the New York Mercantile Exchange in 1983. Tanker rates to come down

Meanwhile, the cost of shipping crude from the West Asia to Asia, the world's busiest oil-tanker route, is heading for its lowest in three months because there are more vessels than refiners need.

There are almost enough supertankers free in the first three weeks of August to handle the Persian Gulf's entire volume of crude cargoes for the month, according to a report e-mailed today by shipbrokers Barry Rogliano Salles in Paris. There are 92 ships available through August 19, and about 100 cargoes for the month if August's total matches July's, the report said. "With tonnage building up in most areas, owners are scrambling to keep their ships employed,'' Oslo-based shipbrokers Fearnleys AS said in a report e-mailed last night. "Though some owners are attempting to squeeze out an extra point or two, they are usually undermined by others.'' Shipowners such as Frontline, the biggest by capacity, may be leasing out vessels at a loss after a 90 per cent tumble in freight rates over the past two months. Rates were at 58.2 Worldscale points today, according to London's Baltic Exchange, their lowest since April 25.

At that level, owners can earn about $26,350 a day from the modern Very Large Crude Carriers, or VLCCs, on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R S Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.

Frontline said on May 30 that it needs more than $29,500 a day to be profitable on each of its VLCCs.

Hire rates sank after Asian refiners reduced imports in May while performing routine maintenance, creating a backlog of unwanted vessels that has since failed to clear.

Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in US dollars a tonne, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

Bookings of supertankers sailing from West Asia to Asia account for 47 per cent of the global demand for carriers, according to the New York-based McQuilling Brokerage Partners LLP.