Photo credit: www.cnbc.com
Chevron CEO Mike Wirth expressed confidence about the U.S. economy, stating that there are no indications of an impending recession despite the impact of President Donald Trump’s tariffs on oil demand. In an interview on CNBC’s “Squawk Box,” Wirth remarked that while growth might be slowing, it does not suggest a recession is looming. “There are no signs that we see at this point that we are in or close to a recession,” he stated.
This optimism contrasts with the International Monetary Fund’s recently revised growth forecast for the U.S., which has been lowered to 1.8% from an earlier estimate of 2.7% for the current year.
Wirth noted that the oil market is bracing for diminished demand due to the tariffs and OPEC+ decisions to increase production rates more rapidly than anticipated. Despite the declining oil prices, Chevron plans to maintain its capital spending strategies, according to Wirth.
Since Trump’s tariff announcement on April 2, U.S. crude oil prices have declined by approximately 11%. As of the latest reports, West Texas Intermediate crude was up by about 72 cents, making it $63.80 per barrel. Additionally, both OPEC and the International Energy Agency have revised their demand forecasts downwards for this year.
Wirth further elaborated on the potential effects of price fluctuations on U.S. production, particularly in regions such as the Permian Basin, where production may decrease if oil prices fall to $60 per barrel. However, he indicated that offshore production would likely remain stable. “If we were to be at a $60 price or even lower, you’re likely to see activity pull back in this sector, and you’ll see the production response over a few months,” Wirth explained.
Despite the uncertainty created by global trade tensions, Wirth noted that Chevron does not expect significant direct repercussions from the tariffs since energy products are largely exempt. Instead, the broader macroeconomic implications, especially regarding growth and trade, are of greater concern to the company.
Feedback from industry leaders regarding Trump’s tariffs has been critical. A survey conducted anonymously among oil and gas executives by the Federal Reserve Bank of Dallas highlighted that those tariffs are inflating their operational costs and could lead to reduced activity in the sector.
Catch up on the latest energy news:
Source
www.cnbc.com