Oil prices reached new highs on Tuesday, driven by supply constraints and the prediction from Chevron CEO Mike Wirth that prices could return to $100 per barrel. West Texas Intermediate (WTI) crude for October delivery rose by 0.8% to $92.29 per barrel, while November Brent crude, the global benchmark, rose by 0.5% to $94.98 per barrel. Both oil prices touched their highest levels since November.
Investors have been pushing oil prices higher despite concerns about China’s economic growth and a sluggish European economy. The market is focusing on tightening supplies, as Russia and Saudi Arabia have curbed production. Last week, U.S. oil prices gained 3.7% and Brent rose 3.6%, ending the week at their highest levels since November.
In an interview with Bloomberg TV, Chevron CEO Mike Wirth stated that he believes crude oil could reach $100 per barrel, a level not seen in over a year. While some market observers are concerned about the impact on the U.S. and global economies, Wirth believes the underlying drivers of the economy remain healthy. He also noted that oil prices have been volatile during the pandemic and that the market has not been in a “midcycle” phase.
Wirth’s prediction comes amidst a gradual tightening of supply and drawdown of inventories. As supplies continue to shrink, the upward pressure on oil prices is expected to persist. However, it remains to be seen whether prices will reach the $100 per barrel mark and what the long-term impact will be on the global economy.
– Dow Jones Market Data