Hedge funds may be back in oil: Ex-Shell Oil chief

Oil's 'ruthless' cost-cutting mode: John Hofmeister

Hedge fund buying may be partly behind the recent rebound in battered oil prices, former Shell Oil President John Hofmeister told CNBC on Tuesday.

"I think some [hedge funds] are already starting to buy because the price is so low," he said in a "Squawk Box" interview. "And why would they miss this opportunity at these prices."

U.S. crude prices were higher again Tuesday—breaking above $50 a barrel for the first time in two weeks, after gaining more than 11 percent in the previous two sessions.

Read MoreOil erases losses for 2015 as majors take action

"The biggest unknown is the demand side, and what's the growth going to be this year," Hofmeister said. "I projected in my own calculations. The surplus will probably continue through midyear."

Hofmeister sees oil prices at $50 to $60 a barrel until summer. "Then hedge funds will start [really] buying lots of oil, setting it in tankers," he predicted, "so they can make a lot of money."

BP Chief Executive Officer Bob Dudley was more reserved—warning on CNBC Tuesday of $50 oil for a while. BP also announced a quarterly charge of $3.6 billion on the back of tumbling energy prices and a cut in capital expenditures by 13 percent to $20 billion in 2015.

Read MoreBP's Dudley: Oil may stick at $50 'for some time'

Last week, Chevron announced a 13 percent cut in capital expenditures to $35 billion, while Royal Dutch Shell announced a three-year, $15 billion cut to spending.

"The capital cuts don't just affect 2015. They're going to affect '16 and '17 as well. Once people start cutting back and they've made the layoffs and they put rigs down, there's no sudden resurgence that's going to come back on," said Hofmeister, founder and CEO of Citizens for Affordable Energy.

"So we're going to see, I think, a slower production growth in the '16, '17 into '18," he continued. "And if the demand growth is what is predicted, then I think we're going to see the return of $100-plus oil."

Last month, one of Saudi Arabia's biggest investors, Prince Alwaleed Bin Talal, predicted on CNBC that the world would never see the price of oil at $100 a barrel again.

Read MoreAlwaleed: No more $100 oil, but we won't blink

—Reuters contributed to this report.