Shale Oil Executive Says Oil Could Bounce To $60 By Year’s End

January 14, 2016, 4:06 PM UTC
Harold Hamm, chairman of Continental Resources Inc., stands
UNITED STATES - OCTOBER 22: Harold Hamm, chairman of Continental Resources Inc., stands for a photo near an oil rig outside Watonga, Oklahoma, U.S., on Wednesday, Oct. 22, 2008. Hamm, owner of a 150-person oil company in 1988, began leasing 30,000 acres of Montana and North Dakota prairie he knew wouldn't produce oil. For 12 years, he sat back and watched rivals fail to draw from rocky ground. Today, geologists say the area may contain more oil than Saudi Arabia, making him the richest U.S. oilman. (Photo by Larry Smith/Bloomberg via Getty Images)
Photograph by Larry Smith — Bloomberg via Getty Images

Not all oil executives are pessimistic after U.S. crude futures briefly dipped below $30 on Tuesday.

Top shale-oil producer Continental Resource’s chief executive Harold Hamm told The Wall Street Journal that he thinks a drop in U.S. shale supply will cause oil prices could rebound to as much as $60 by the year’s end.

U.S. producers are cutting production at a rate of 1.6 million barrels per year—a move that Hamm says could cut the global supply glut that was such a big contributor to the oil price collapse. “We’re heading toward a short supply situation unfortunately,” he told the Journal on Wednesday. “That’s going to get very concerning in the latter part of the year.”

Hamm also criticized the Organization of the Petroleum Exporting Countries’ response to the price collapse. OPEC has pumped oil at elevated levels rather than cut production—protecting its share of the market, but aggravating the global oil oversupply situation. In November, Bloomberg reported that OPEC crude production rose to a three-year high.

 

The oil executive is optimistic compared to Wall Street, where banks are cutting their outlooks as oil shows few signs of rebounding. On Monday, Morgan Stanley predicted that oil could fall to $20 or $25 due to the strong dollar. Bank of America Merrill Lynch also released a note Monday saying that average crude oil prices could end the year averaging at $45—sliding below $30 before beginning to rebound in the second half of the year. Last month, Goldman Sachs said that a $20 barrel was in sight.