This is a partial transcript from "Your World with Neil Cavuto," June 28, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: So, maybe, just maybe oil is on its way down after hitting $60-plus a barrel yesterday. The price of crude, as I indicated, dropping more than $2. So, which is it, $60-plus or $60 less? And what does it all mean for the markets?

Let's ask oil tycoon Boone Pickens. He is the head of B.P. Capital.

Of course, Mr. Pickens has the distinction of being the first big muckety-muck I used to interview 20-some-odd years ago.

T. BOONE PICKENS, FOUNDER, B.P. CAPITAL: A long time ago.

CAVUTO: When you were chasing companies. Good to have you in the flesh.

PICKENS: Thank you.

CAVUTO: You got some press lately when you said that, look, you might not like these high oil prices, but, in a sense, get used to them. What did you mean?

PICKENS: Well, you know, back to the supply is always where I start. And you got 84 million barrels a day globally, and we have got...

CAVUTO: Eighty-four million available or that we're using?

PICKENS: That's what's available and that's what we're using.

CAVUTO: So, we're using everything?

PICKENS: I don't think you have got 500,000 barrels a day left over.

CAVUTO: Wow. So, there's no wiggle room there?

(CROSSTALK)

PICKENS: That then takes you to the fourth quarter, where you have predictions — and I believe they're real — at 86 million barrel as day. So, I think that get ready for higher oil prices.

CAVUTO: The cynic might say, Mr. Pickens, that you are a big oil guy. You have a lot at stake. With oil continuing to run up, that's just a guy who is profiting off his call.

PICKENS: Well, that could — that be said. I am an oil guy. There's no question about it, for over 50 years. And that's why I think that I can see what's going to happen to us. And...

CAVUTO: So, by the way, you have argued this is going to happen across the energy spectrum, right? Everything is going to move up.

PICKENS: Oh, that's right.

CAVUTO: Yes.

PICKENS: But, you know, Neil, for years and years, I have made my predictions, my direction has been good. Timing sometimes has been off.

But, you know, I go back through the '90s, when I couldn't hit it out of the infield. And...

CAVUTO: Yes, but I think your batting average is pretty good.

Let's talk a little bit tonight about how this could be affected by what the president says tonight. Any connection?

PICKENS: I don't know...

CAVUTO: I mean, if Iraq (search) gets much worse, is the feeling that — now you got a bellicose new guy taking over in Iran. Iraq looks kind of messy. Oil prices keep going up?

PICKENS: Well, I mean, we talked about the oil price, but just touch on it a second.

You know, the guys that said that Iraqi production would be up to three million barrels a day two years ago, we don't have a prayer. We're a million-and-a-half.

And when we look at, how does it impact the president, all that impacts the president. But he's not running for re-election.

CAVUTO: So, what does he have — what does a Boone Pickens want to hear the president say tonight, oil notwithstanding?

PICKENS: That we've passed an energy bill (search). That would be the first thing I would like to hear him say.

CAVUTO: Yes. Well, we haven't and we won't likely anytime soon.

(CROSSTALK)

PICKENS: Well, the Senate — it went through the Senate today 85-12. So, I mean, you're getting closer. I think it will be after the Fourth of July, but we're going to have an energy bill.

CAVUTO: But House and Senate are widely apart on this, aren't they?

PICKENS: Well, not so far.

CAVUTO: No?

PICKENS: No, I think that...

(CROSSTALK)

CAVUTO: So, you think it's going to happen.

PICKENS: I predict that you're going to have an energy bill before the summer is out.

CAVUTO: Do you think, if energy weren't so stubbornly high, the president would be in the poll fix he is in, Iraq even notwithstanding?

PICKENS: I somehow don't connect the price of oil to the poll problem. I think...

CAVUTO: What do you think the problem was?

PICKENS: I think the problem we have in Iraq is that it's tougher than we thought.

We're going to get there. And they're going to have a democracy. And that's I think that is what the president wanted, and I think that's what he's going to get.

CAVUTO: Does it trouble you that the way it's presented in the media is that it's not going well and that the president is behind the eight ball and that he's flailing?

PICKENS: Well, I mean, that's really a loaded question. Yes, I don't like the way it's presented in the media, but...

(CROSSTALK)

CAVUTO: But you think there's more good than bad, right?

PICKENS: That's been going on forever.

CAVUTO: Right.

PICKENS: I don't like the way things are presented.

(CROSSTALK)

CAVUTO: The media was always after you in your days, right?

(CROSSTALK)

PICKENS: ... totally unfair.

(LAUGHTER)

CAVUTO: Let's get a sense, Boone, if we can, about oil right now. There are a lot of Americans who are saying, you mean I'm going to be paying $2.50 a gallon for gasoline? You're saying you will miss the days you were paying that, right? You are saying you're going to go much higher.

PICKENS: I think you're going to go much higher.

CAVUTO: How much?

PICKENS: Oh, I said that we would see $3 gasoline within a year. Now, immediately, I was — in the media — I was identified as saying we're going to see $3 gasoline. Didn't say when. But it's going to take us a year to get there, but I think that's going to happen.

CAVUTO: And then, after that, that becomes the new kind of nesting place for it?

PICKENS: I don't know whether we do that or whether you cannot get prices down. And you have got to kill demand.

And the only way you can kill demand is get the price up. And I just gag when I see these guys get on and say, we have got to get the price of gasoline down. No, you don't, because that will cause demand to go up and it will get the opposite effect. The price of gasoline has to go up to kill demand.

CAVUTO: But it might kill the economy, too, right?

PICKENS: Well, that — I'm not an economist, and I know that the price of oil and gasoline is much lower to the overall GDP (search) than it was, say, 20 years ago or 10 years ago. So I know it's not as impacting as it was.

CAVUTO: All right. Boone Pickens, do you miss the days I used to chase you around with a microphone?

PICKENS: Sure.

CAVUTO: You were always very polite. You would ignore me, but be polite, say, thank you, no comment. I always liked that.

(LAUGHTER)

PICKENS: Did I ever have a no comment?

(LAUGHTER)

CAVUTO: T. Boone Pickens, ladies and gentlemen, we'll see if he's right on this energy stuff.

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