EIA forecast error keeping oil prices low: Harold Hamm

Harold Hamm, CEO of Continental Resources (NYSE:CLR), an American oil and natural gas exploration and production company, told FOX Business that the slight uptick in oil prices is due to small adjustments made in the Energy Information Administration’s (EIA) short-term energy outlook.

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“Recently with their September short-term energy outlook, they made an adjustment of 130,000 barrels down. It should have been about 500,000 barrels actually,” Hamm told Maria Bartiromo on Mornings with Maria.

Hamm said his estimates for oil production pales in comparison to the EIA’s.

“We are showing about 9.35 million barrels, 9.4 million barrels by the year’s end for the U.S. In comparison their prediction was 9.8-9.9, close to 10 million barrels,” he said. “If you look back when Nigeria and Libya brought on an extra 400,000 barrels, the price was hit some 20%, it went down $53 to $43, and we feel like that’s about the adjustment that’s due right now.”

President Trump has boasted the potential of U.S. energy resources to expand the economy. While the U.S. has “a lot of energy capacity to produce,” Hamm said high oil prices are having a negative impact on operators.

“Operators are doing what they can with today’s prices and so they’ve cut back – OPEC cut back – and the market needs to realize that energy producers in this country are showing great discipline, and they are not being rewarded for that,” he said and added that it’s misleading the market. “When you look at historic prices… recently it’s out to $6 a barrel. And right now it’s about $5 a barrel. We are taking a beating in the U.S. of some $3 to $5 a barrel. So are we putting America first? Absolutely not.”

Crude oil prices traded up near 1.09% hovering around $50 a barrel, but in Hamm’s opinion “$50 a barrel is unsustainable.”