USAI - Chevron CEO says $100-a-barrel oil is coming as global oil supply has been tightening

2023-09-19 11:25:08 ET

Crude Oil Brent surpassed $95 a barrel on Tuesday for the first time since November 2022, and Mike Wirth, chairman and CEO of Chevron ( NYSE: CVX ), said the market is certainly moving towards a $100 a barrel environment.

On Monday, the U.S. Energy Information Administration said that U.S. oil output from top shale oil-producing regions will decline to 9.393 million barrels per day in October. The Organization of the Petroleum Exporting Countries moved to curb oil supply on Monday due to volatility in the markets and global economic uncertainties.

As crude oil supply is tightening, inventories are drawing, and demand is steadily increasing, "the trends would suggest that we’re certainly on our way" to double-digit prices per barrel, he said.

The impact of $100-a-barrel oil would certainly affect the economy, but "thus far, the economy has been able to tolerate it," Wirth said.

"The recession hasn’t arrived," Wirth said. "The underlying drivers of the economy in the U.S., and frankly globally, remain pretty healthy."

Crude oil Brend reached its highest price in July 2008, surpassing $147.5, and then in May of last year, reaching more than $120.

Crude oil futures ( CL1:COM ) are up more than 35%, the highest they’ve been in almost a year. Oil ETFs USO , UCO , BNO , SCO , USL , DBO , USOI , NRGU , OILK , USAI have also risen this week.

In a year, the price of crude oil has increased 11.53%; natural gas prices have decreased 63.93%; Brent prices have increased 8.74%; gasoline prices have increased 11.49%; coal prices have decreased 63.39%; naphtha prices have increased 11.40%; and propane prices are up 26.75%.

"We’ve been in a very volatile market…where price had been unpredictable and volatile, and not what you would call mid-cycle," he said.

More on Chevron:

• Seeking Alpha’s Quant Rating on Chevron
• Oil Could Hit $300 A Barrel
• Chevron Corporation (CVX) Management Presents at 2023 Barclays CEO Energy-Power Conference Call Transcript
• CrownRock exploring potentially biggest U.S. oil and gas sale in three years - Reuters

For further details see: