This week, the price of oil fell below $30 for the first time since December 2003. It’s also down 72 percent from $107 just 18 months ago.
But Oklahoma’s wealthiest resident and the head of Continental Resources says he expects crude prices to double by the end of the year. In a Wednesday interview with The Associated Press, Harold Hamm said even though he thinks oil hasn’t bottomed out just yet, it will hit $60 by this time next year:
Hamm said the energy sector has great potential and is priced very low, although he acknowledged that it is going "to take some fortitude to come back into the market." He said once investors see energy prices at a bottom, sentiment toward stocks can change rapidly.
Hamm, 70, says that as a result of the return of the U.S. as an oil power and the decline of OPEC's dominance "we're free of much of the chaos" that could influence prices. He noted that in the past, the price of oil would have shot up on news that Iran detained two U.S. boats and 10 sailors. "Was there any impact? No."
Hamm said he thinks drillers in North Dakota and Texas will scale back their production in order to ease the market’s current glut:
Hamm's company helped lead a renaissance in the U.S. oil industry through the use of horizontal drilling to free oil trapped in shale rock.
U.S. oil production rose from 5 million barrels a day in 2008 to nearly 10 million in the early part of last year. Combined with OPEC's decision to keep production at high levels, supply eventually outpaced the growth in demand and prices plummeted.
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