CNBC’s Kilduff: $100 Oil in Next Six Months

Jeff Poor
Business & Media Institute
Wednesday , January 13th, 2010

It
hasn’t been in the limelight recently, but it is coming.
According to CNBC contributor John Kilduff of Round Earth Capital, we
will soon see the price of reach $100 per barrel.

On
CNBC’s Jan. 11 “The Kudlow Report,” host Larry Kudlow
asked Kilduff what it would take for the Obama’s administration
to change its energy policy to allow for more oil exploration and
drilling.

“Oil
is hitting a 15-month high at $83 a barrel and it was $30 about a year
ago,” Kudlow said. “So, Interior Secretary Ken Salazar
rules drilling of oil and gas out of bounds for federal lands. No
drilling. So, how high does it go before we go back to drill, drill,
drill?”

Kilduff confirmed he had
forecasted a $100-a-barrel oil earlier this year and said that a
vibrant Chinese economy will help prove him right.

“It’s
making my $100-barrel oil on the first half of the year a lot easier to
sit with Larry because we’re clearly on course for that for a
variety of reasons, not the least of which is the China economic
numbers which you discussed in your last segment with Mr.
Holland.” Kilduff said.

Kilduff urged preparation for higher oil to be more aggressive.

“The
good news is oil prices are up because there’s an absolute
recovery under way,” Kilduff said. “The China story, as far
as I can see it, is as real as a heart attack. And we better prepare
for that.”

Kudlow
asked if we needed to rely on “windmills on Nantucket” as a
new power source and Kilduff told Kudlow that wasn’t a good idea.
But he also refuted the theory of peak oil.

“Well
if we do it will be very expensive, Larry,” Kilduff said.
“And I have been opponent of the peak oil theory my entire
career, not for the least of which reasons was that this
morning’s announcement from McMoRan Exploration and several other
companies who might have made the oil find of a decade in shallow Gulf
waters. And it’s a real game-changer for the companies involved
and it’s in a neighborhood that is going to be one of the biggest
finds in decades.”

Peak
oil is a theory that there exists a point in time when the maximum rate
of global petroleum extraction is reached. However, a recent BusinessWeek article
disputed this theory and Kilduff explained that when this idea was
conceived, there wasn’t the technology to confirm such a theory.

“With
new technologies every day, Larry,” Kilduff said. “This was
thigh problem with the peak oil theory from the beginning. How could
you have the hubris to tell me that we had the knowledge and the
science to help us find this oil? Our cell phones were as big as cars.
Now they fit in your pocket, right? Now, the same thing goes for
satellite technology that can find oil and new drills that can get to
places without harming the lands anywhere near what we had in the
’50s and ’60s and ’70s.”