Chevron CEO: Ignore Short-Term Factors, Focus on Supply and Demand

Oil and the companies that drill for it are both deeply out of favor today.

There's a host of reasons, including a supply/demand imbalance caused by increasing U.S. onshore energy production. Only investors are increasingly focused on near-term events like the attack on Saudi oil facilities and geopolitical moves by countries like the U.S. and Iran. The CEO of oil giant Chevron (NYSE: CVX) is looking past temporary issues like these, and so should you. Here's why.

In an interview with CNBC in January of 2020, Chevron CEO Michael Wirth was asked about the increasing tensions between the U.S. and Iran. He quickly pointed to an attack on Saudi Arabian oil assets in late 2019 that took key production assets off line. The news led to a swift rise in the price of oil, but prices quickly settled back down. He predicted that the same would happen again with Iran, because the oil market is "pretty well supplied." He was correct -- oil prices initially rose, but then pretty quickly fell again.

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Source Fool.com