Star hedge-fund manager Jean-Francois Tardif says he is looking for oil to rebound to between US$55-$60 per barrel in the next 12-18 months as the current supply glut eases and demand picks up.

The founder and portfolio manager at Timelo Investment Management made headlines during the previous oil boom when he called for crude to fall from its perch above US$100 per barrel. Now, Tardif argues oil is oversold.

“I was bearish for many years,” he told BNN. “It took two years more than I thought [for the oil crash].  A lot of people didn’t believe that – now it’s turned around and a people just don’t believe the price [of oil] can ever go up again.”

Oil may not hit the lofty prices above US$100 again, but continued strong demand and a pullback on supply – particularly from OPEC countries like Saudi Arabia -- could drive crude oil prices higher, according to Tardif.  Plans for an initial public offering of a stake in the Saudi state-owned oil company Aramco could prompt the oil giant to pull back on supply and help drive prices higher, he added. “Do you think they are going to go public when oil is $43? I don’t think so. I think they probably want oil to go higher so we could see them press the pedal less in the months ahead.”

Tardif was a high-profile portfolio manager at Sprott Asset Management before retiring from the firm and starting his own company.  Tardif recommends investors stay away from heavily indebted companies whose share price is closely linked to oil prices in favor of low-cost producers with solid balance sheets.

Tardif is also bullish on natural gas and says gas prices could hit US$3/mcf.  He thinks one company that could benefit from stronger natural gas prices is Birchcliff Energy. Investors were turned off by the company’s high debt-load; however, a recent restructuring has helped shore up the balance sheet, he said.  Timelo has a $17 price target on the stock that is currently trading well below $9 per share.