Oil prices are constantly rising, with the expectation that they may soon reach $100 per barrel. Chevron CEO Mike Wirth attributes this increase to supply constraints. However, he remains optimistic about the economy’s ability to cope with higher costs.
The price of West Texas Intermediate crude oil has risen nearly 30% since July, reaching a high of $91.36 per barrel. Similarly, Brent crude oil hit a ten-month high of $94.95 per barrel. Gasoline prices at gas stations have also increased, reaching a national average of $3.88 per gallon.
Wirth believes the rise in oil prices is due to a combination of supply constraints from countries like Saudi Arabia and Russia, as well as a strong economy driving greater demand for the product. As prices approach $100 per barrel, Wirth says this will not significantly affect the economy.
“It will have some effect on the economy, but we have had relatively high oil prices for most of this year. “The underlying drivers of the U.S. and global economy are still pretty healthy, so I think it’s a drag on the economy, but so far the economy has been able to tolerate it,” Wirth explained.
Chevron, with a market valuation of $320 billion, is the second-largest oil company in the United States, after Exxon Mobil.
In conclusion, oil prices are increasing and there is a possibility that they will reach $100 per barrel. Although this increase could affect the economy to some extent, Wirth is confident that the underlying strength of the economy will prevail.
Definitions:
– West Texas Intermediate Crude Oil: A category of crude oil used as a benchmark for setting oil prices in the United States.
– Brent Crude Oil: An important classification of crude oil used in international pricing.
– Supply limitations: restrictions on the availability of oil caused by factors such as reduced production or geopolitical tensions.
Sources:
– Business Insider (Source article)
