Wilbur Ross: Don't Think Oil Price Will Turn Till Late 2016

Renowned investor and Chairman & CEO of WL Ross & Company, Wilbur Ross, was on CNBC to discuss the continuing weakness in oil prices and make projections about where they are heading. Ross also shared the opportunities for investments he currently finds in oil and gas sector.

Where Do You Think Oil Is Heading?

“We think oil is going to be very low for at least through 2015 probably well into 2016 and then probably levels; more or less levels rounded around $70 a barrel,” Ross said. “We don’t see it going back to anything like where it was and it could get very messy near-term because the incremental cost of lifting it is pretty low. So, nobody is going to stop lifting just because it’s at $45 or $40 or $35.”

Are You Finding Any Opportunities For Investments?

“We have been getting very interested in the busted bonds of the smaller and exploration and production companies,” Ross replied.

When Do You Think Oil Prices Will Make A Turnaround?

“I don’t think oil price will turn until late into 2016,” Ross said.

Hurdle For Oil Companies

“I think it [oil prices] could be a little lower before it goes back up,” Ross said. “But and I think the real key for the financial stability of those companies, Most of them have asset backed loans from the banks and they re-determine values every April and every October. So, the first hurdle for these companies to get through is April, the bigger hurdle will probably be October.”