Tillerson Says Oil Should Be $60-$70 A Barrel

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Exxon Mobil CEO Rex Tillerson said using only supply and demand as a barometer, oil prices should be $60 to $70 a barrel, not trading above $100. Tillerson said the reason oil trades around its current levels is because big oil companies use futures contracts to lock in current prices.

Tillerson also pointed to high-frequency trading from hedge funds as another reason oil prices remain high. The Exxon boss made the comments last week before Senate committee that is investigating high oil prices. ''When we look at it, it's going to be somewhere in the $60 to $70 range if you said: 'If I had access to the next marketable barrel, what would it cost?,''' Tillerson said, Reuters reported.

Even at prices between $60 and $70 a barrel, oil majors such as Exxon (XOM) would still post robust profits as it was revealed at the Senate hearing that the average cost of producing one barrel of oil was $11, Forbes reported.

In the first quarter, Exxon, a Dow component and the largest U.S. oil company, saw its earnings surge 69% to $10.65 billion, or $2.14 a share. Exploration and production profits jumped 49%.