“We’re probably in the lower, longer view,” Cohn, a former oil trader, said Monday in a CNBC interview.
Crude oil has slumped almost 60% since June as the Organisation of Petroleum Exporting Countries (OPEC) resisted calls to cut output and the US pumped at the fastest pace in more than three decades. Drillers in the US have begun to idle rigs as falling prices make wells aiming to tap shale reserves unprofitable.
Cohn, 54, said the commodity business is “very, very strong” because consumers and oil-producing nations are in different positions than they have been in the past few years.
“If you’re a consumer today and you can lock in these prices, you’re a lot more aggressive in the markets in hedging than you ever have been,” Cohn said.
“The flip side is if you’re an oil-exporting country today and you’re looking at these oil prices and you see a fairly steep forward curve and you see 10 or 15 dollars of price higher a year forward then you do in the spot market, you have to consider trying to lock into that forward price.”
US crude inventories probably rose to 401.9 million barrels last week, the highest in records dating back to August 1982, a Bloomberg News survey shows before a government report yesterday. A spike to $200 a barrel is possible without adequate investment for the long term, OPEC Secretary-General Abdalla El-Badri earlier this week. Prices pared losses as the dollar weakened.
“The market is trying to stabilise but the oil inventory data that will come out tomorrow will negate all that,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisers. “Any rally will be short-lived. I won’t be surprised to see prices in the 30s in a few weeks.”
OPEC, which supplies about 40% of the world’s oil, is open to a meeting with non-member producers to tackle the global glut, El-Badri said in an interview in London, estimating the surplus at 1.5 million barrels a day. He didn’t offer a date for when oil could reach $200 a barrel and said the market would be brought back into balance by a reduction in supply, rather than an increase in demand.