Chevron's CEO Sees More Upside Ahead for Oil Prices. What Does That Mean for Oil Stocks?
Crude oil prices have cooled off considerably in recent weeks. Oil has fallen more than 20% over the past month, dropping below $100 a barrel. It's even further off its peak of more than $130 a barrel, a pinnacle it reached following Russia's invasion of Ukraine.
However, Chevron (NYSE: CVX) CEO Michael Wirth thinks oil prices could rebound quickly. He told CNBC in a recent interview that "the tightness in supply hasn't gone away." Because of that, he sees "the risks remaining skewed toward the upside." That suggests oil stocks -- many of which have cooled off along with oil prices -- could have more upside than downside from here.
Despite the recent slump, crude oil prices are still up about 25% this year. The main driver has been supply issues stemming from underinvestment during the pandemic. Most oil companies significantly reduced their capital investment in 2020, which is having a negative impact on production. As a result, there has been a razor-thin margin between supplies and demand, as consumption has recovered following the relaxation of most pandemic-related travel restrictions.
Source Fool.com
