Get ready for 'a new chapter' of rising oil prices: Hess CEO
With oil and gas becoming top priorities for economic growth in the incoming administration and the recent agreement among OPEC and non-OPEC member countries to cut production, oil and gas prices will rise, Hess CEO John Hess told CNBC on Wednesday.
"You clearly have to have a new chapter of rising oil prices to attract investment, to grow supply, to keep up with growing demand," Hess told " Squawk Box ." "I think we're now in an upward trajectory of prices."
In a capital-intensive business such as the oil and gas industry, attracting investment is key, and the OPEC deal will help because it will end the supply glut that has deflated prices, he said.
"At the end of the day, what's most important for oil and gas supply? The price," Hess said. "We have to have the price signal to make sure we have enough supply to be affordable, that it's going to keep price stability, and it's also going to have supply security."
Hess said that for supply and demand to strike a good balance, oil prices need to trade in a range of $60 to $80.
West Texas Intermediate (WTI) and Brent crude were down about 1.5 percent Wednesday.
Hess cheered Trump's tap for secretary of State, Exxon Mobil (XOM) chief Rex Tillerson, calling him an "outstanding business leader" who is well-qualified and "knowledgeable about foreign affairs."
Regarding concerns about Tillerson's relationship with Russian President Vladimir Putin, Hess said the oil executive "deals with Putin as a government leader as he would any government leader where he has to do business," brushing off rumors that the two are friendly.
"It's clear that the Trump administration puts a high priority on energy, that oil and gas are engines of economic growth going forward," Hess said.
Correction: This story was revised to correct that Hess said oil prices need to trade in a range of $60 to $80; he did not predict a price range.
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