It takes a big man to admit when he’s wrong – and, when it comes to the oil business, there doesn’t come any bigger than T Boone Pickens.

Pickens became the 117th richest person in America by a series of oil corporate raids and acquisitions in the 1980s. He is a genuine legend. He’s also man enough to admit when he is wrong, which means I respect him even more.

Pickens admitted he got it wrong on the oil price. He has been running the BP Capital hedge fund and revealed overnight that he has now reversed his short position in crude futures.

“I covered the short position; it was a mistake on my part. We missed.”

Indeed, he has now gone long and has predicted that WTI futures will hit $125 in short shrift. My current view is that we will see $120 sooner rather than later, so we now appear to be singing off the same hymn sheet.

The oil price is now at $111.15, with the futures strip price (the average of the next 12 months WTI contracts) at $111.81, up from $111.61 at the start of trade on Thursday.

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There was more bullish news for the oil price this morning from Nigeria. Not only is their infrastructure in crisis, but pipeline explosions have become almost de rigueur.

The Movement for the Emancipation of the Niger Delta (MEND) issued a press release this morning, saying it would funnel explosives to communities there to use against oil companies.

Oil companies working along the coastal region of Nigeria “are in for a raw deal as the military is not in the position to protect them… [it will] offer materials such as explosives to communities that have now realized that it is better to destroy oil facilities in their territory since they do not benefit [from] them in the first place.”

Now, of course, the people of the Delta have a point. It appears that they are not benefiting at all from Nigeria’s oil wealth (although bombs are not the way to reverse that situation in my mind).

However, it is not my job to moralise on this situation; I’m here to look at facts.

With global supply so tight, any supply disruptions will send oil traders into a tizzy – and give T Boone Pickens his $125 level sooner than he thinks. This is yet another bullish factor for the oil price.

Regards,

Garry White

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