Harold Hamm, billionaire oilman, says the oil market is at a turning point, and he's taking important steps to get ready for the day when the U.S. will have to ramp up crude production.
Hamm, chairman and CEO of Continental Resources, appeared Thursday on CNBC's "Squawk Box" with a prediction that oil would rise to a lofty $69 to $72 per barrel — a leap above the then nonconsensus call of $60 he made on the program in January.
Hamm's year end forecast is also well above most current industry expectations, which have risen to around $60 at year-end. He said what's fueling his revised forecast is the faster-than-expected rebalancing of supply and demand.
"This rebalancing occurred early in the second quarter, not in the third. By the fourth quarter we'll have over a million barrels a day shortfall," he said, "In 2017, we could see the shortfall extend up to 2 million barrels a day undersupply. Because of that, we will see pressure on prices then and the undersupply comes primarily from light sweet crude oil."
Citing cutbacks by U.S. producers and the Nigerian disruption as some reasons behind the loss of supply, Hamm said the price differentials building in the world between sweet crude, sour and heavy oil could vary widely.