Oil prices are on the rise and are approaching $100 per barrel. Chevron CEO Mike Wirth suggests that ongoing supply constraints are contributing to the increase, but he believes that the economy can handle it. Despite the potential negative impact on consumer sentiment, Wirth believes that the economy has proven its ability to tolerate higher gas prices.
According to Wirth, the rise in oil prices is driven by a combination of ongoing supply constraints, as Saudi Arabia and Russia have extended their production output, and a resilient economy that is driving demand for the commodity. Wirth states that supply is tightening, inventories are decreasing, and the trends suggest that the prices will continue to rise towards $100 per barrel.
Gas prices at the pump are also rising, with the national average price reaching $3.88 per gallon. However, Wirth remains optimistic about the economy’s ability to handle the increase, citing the relatively higher oil prices seen throughout the past year without causing a recession. He believes that the underlying drivers of the economy, both in the US and globally, remain strong.
With a market valuation of $320 billion, Chevron is the second largest oil company in the US, trailing behind Exxon Mobil.