Hess Corp CEO John Hess acknowledges that oil prices are “definitely in a lower-for-longer environment,” but they will still almost double from current levels (~$35/bbl) by late next year.
In an interview on CNBC Friday morning, Hess said, “By the end of next year, I think the price will start moving up as supply growth starts to retard [and] demand goes up…All of a sudden the market is going to draw on inventories, and you’re probably going to be looking at least at $60 by the end of next year.”
Hess’s comments come as Goldman Sachs reiterates its forecast that oil will eventually bottom at $20/bbl. At this level, analysts say companies would be forced to implement the steep production cuts needed for the market to begin recovering.
Goldman and Hess blamed OPEC’s decision to allow its members to produce at will at its meeting earlier this month as a major headwind for the global market. They also referred to supply concerns ahead of Iran’s expected reentry into the oil market early next year after sanctions are lifted.