Famed investor T. Boone Pickens has exited his oil holdings, citing concerns over growing crude inventories.
In an interview with “Bloomberg Go”on Thursday, Pickens revealed that he has sold all of his holdings in oil and will wait to jump back into the sector.
According to data compiled by Bloomberg, Pickens began selling his oil holdings in the third quarter of last year.
Pickens cited swelling crude inventories as a key factor behind his wait and see strategy.
“I will not re-enter, I’m sure, until we start to draw on inventories.That’s a key point,” Pickens told Bloomberg.
U.S. crude inventories jumped past 500 million barrels for the first time ever as of January 29 after a larger than expected gain of 7.8 million barrels, according to the U.S Energy Information Administration.
U.S. crude inventories now stand at 132 million barrels above the five-year average.
Pickens added that he expects investment and job cuts in the energy sector will cut production enough to bolster prices back up to the $50 to $60 per barrel range by the end of the year if the U.S. economy doesn’t enter a recession.
Even when oil prices bounce back Pickens expects the recovery to be rocky.
“The low is in. 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,” Pickens told Bloomberg.
West Texas Intermediate was trading at $31.87 per barrel before the opening bell on Friday.