Oil prices are on the rise and are approaching $100 per barrel. Chevron CEO Mike Wirth suggests ongoing supply constraints are contributing to the increase, but believes the economy can handle it. Despite the potential negative impact on consumer sentiment, Wirth believes the economy has proven its ability to tolerate higher gas prices.
According to Virtue, the rise in oil prices is being driven by a combination of ongoing supply constraints as Saudi Arabia and Russia expand their output, and a resilient economy driving demand for the commodity. Wirth says supply is tightening, inventories are shrinking, and trends suggest prices will continue to climb toward $100 a barrel.
Gas prices at the pump are also rising, with the national average 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 over the past year without causing a recession. He believes that the fundamental drivers of the economy, both in the US and around the world, remain strong.
With a market value of $320 billion, Chevron is the second largest oil company in the US, behind Exxon Mobil.