$100 a barrel oil “sure is possible,” Harold Hamm, executive chairman at Continental Resources, told FOX Business on Thursday, commenting on oil prices and supply and demand on the oil market.
Oil prices are coming back where they were pre-pandemic, Hamm said, noting that commodity prices, including crude and natural gas, have returned to sustainable levels following last year’s crisis.
Asked to comment on the rising price of WTI Crude, which hit $73 per barrel this week, Hamm said that the U.S. Administration’s moratorium on federal permits and the disciplined business operations of the U.S. shale patch this year have played a part in reduced oil supply.
“The market is not paying for growth today,” Hamm told FOX Business.
“People are disciplined in their approach and they are giving a lot back to their investors and that’s what the market is looking for today,” the shale executive added.
“When you get to constraining supply you get prices that go up and that is a lot what is happening today,” Hamm noted.
$100 oil would likely bring back more drilling and supply in the United States, but there is a possibility that prices could go up as high as triple digits, according to Continental Resources’ executive chairman.
Hamm is the latest oil executive not ruling out the idea of $100 oil.
The chief executives of some of the world’s largest oil companies also said earlier this week that $100 oil isn’t a fantasy.
Exxon’s Darren Woods, TotalEnergies’ Patrick Jean Pouyanné, and Shell’s Ben van Beurden said oil prices could continue rising because of the tightness of supply brought about by lower investments in production. They added, however, that market volatility could also pressure prices.
Expectations that strong demand recovery would outpace supply in coming months could lead to oil prices briefly hitting $100 per barrel in 2022, BofA Global Research said this weekend.
The world’s largest independent commodity traders are also bullish, not ruling out $100 oil. Although oil may not be headed to a new supercycle, prices still have room to rise from current levels because of a strong demand rebound and expected tightness in supply, top executives at Trafigura, Vitol, and Glencore said at the FT Commodities Global Summit last week.
By Tsvetana Paraskova for Oilprice.com
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