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.