“After oil prices plummeted, I went on record saying I thought they’d be back above $70 per barrel by the end of 2015.  The year isn’t over yet, but my prediction isn’t looking good.”

That's what oil tycoon T. Boone Pickens just told the CNBC audience, still unwilling to abandon his call for $70 oil.

The oil tycoon made that call at the end of July, expecting the Saudis to cut production.

Investors bought in following the advice, only to watch oil fall another 17%.

So where did the billionaire go wrong?

He was overly dependent on OPEC cutting back on production or holding steady.

Instead, OPEC sent prices down even more, increasing production by almost a million barrels a day.  “I erred in underestimating OPEC's determination to keep the flow of oil under their control,” he says.

But this wasn’t the billionaire’s only bad call on oil.

In December 2014, the prominent oil tycoon made a call for $100 oil over the next 12 to 18 months, expecting OPEC to cut production by the first half of 2015.

Then, in February 2015, Pickens said falling rig counts would indicate a bottom.

Rig counts mean nothing, though. They’re meaningless. Rig counts rise and fall all the time.

Yet, it did little to prevent investors from chasing the call.

Oil would fall $10 shortly after.

By March, investors chased the rig counts again, betting U.S. production would soon fall. Oil would run to $60 before plunging more than 35% on news of a global glut.

Nowadays, as investors chase the latest 29% rally, they’re about to learn things the hard way… again.

Beware the Dead Cat Bounce

Renewed hope of rebounding oil prices are likely to be short-lived on the supply glut and a great lack of demand.  We have to remember that even though U.S. production looks like it’s declining, there global supply is picking up steam.

Saudi Arabia, Qatar, Kuwait and the United Arab Emirates are all “working to increase their market share by bringing new production online over the next few years,” Pickens admits.

“Iran will become an even bigger factor in the next few years now that the removal of sanctions allows them access to more of the world market. And Iraq has some of the world's largest reserves.”

As your editor has noted several times, now is not the time to chase oil.

The bottom is still not in.  Oil prices will fall from recent highs.

After a build of 2.5 million barrels in September 2015, the U.S. Energy Administration saw a 3.1 million barrel build in the week ending October 2, 2015.

Total U.S. crude inventories now sit at 461 million barrels – nearing levels not seen in the last 80 years.

And while we may have evidence of a dip in Cushing numbers, we have to consider the likely seasonal pullback in demand in coming months.

That coupled with scarcity of oil storage space is likely to put further stress on oil prices.

Again, Sell Hope, Buy Despair

The latest rally has brought a lot of hope back into the oil market.

That hope has kept prices high in recent weeks.  But it will be short-lived.

Boone Pickens, OPEC, oil insiders can attempt to call a bottom as long as they’d like. But there are no signs of it.

Investors chasing the latest hope are about to learn the hard way yet again.

When the worst has been priced in, trust me, we’ll make a very profitable move.

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