Oil is set to hit a bottom according Rob Thummel of Tortoise Capital Advisors.
The portfolio manager whose firm is focused on investing in the energy sector thinks that although this commodity cycle has been “painful” and thus far the second largest in duration since the 1980s, it will soon scrape the bottom of the barrel.
“Here’s how you get there: You see U.S. production start to fall, and you see demand continue to remain strong,” Thummel said Wednesday on CNBC’s “Power Lunch.” He expects prices to move higher within the next five to 10 years with long-term prices ranging between $60 and $80 a barrel.
Worries about oversupply continue to weigh on markets, not to mention slowing demand in China. Data on Tuesday showed that U.S. gasoline and crude inventories rose above expectations, just as more oil was being introduced into the market.
Thummel, whose firm has $13 billion of assets under management, which is down significantly during this crude glut, said that “the first quarter we always see raises in inventory … but as you move into the summer and into the spring you start to see driving and [oil] demand [starting] to pick up.”
Oil settled up 8 percent on Wednesday as the market shrugged off the data from the day before.