Robust global growth mean the underlying economy can withstand such a price spike, Wirth said during a Bloomberg Television interview on Monday.
“We’re certainly moving in that direction,” the leader of the second-largest US oil company said. “Supply is tightening, inventories are drawing, these things happen gradually and you can see it building. The trends would suggest that we’re certainly on our way, we’re getting close.”
Brent futures, the international crude benchmark, climbed to within a nickel of $95 a barrel on Monday and has jumped almost 12% in the past three weeks amid strong demand and supply curbs by oil powerhouses Saudi Arabia and Russia.
Wirth has held a bullish view on oil for some time. In March, he cited a combination of dwindling spare production capacity around the world and the anticipation that China’s economy will pick up speed again.
He also forecast that oil would reach $100 in January 2022, citing geopolitical risks. At the time, prices were trading just under $87. By March, they topped $130 after Russia’s invasion of Ukraine.
While the Chinese recovery this year has been slower than many expected, it’s now “coming back” and is “one of the reasons why you’ve seen crude oil prices tightening,” Wirth said.
Oil demand will reach a record 102.2 million barrels a day this year, up 2% from a year ago, according to the International Energy Agency. Growth will slow next year due to the post-pandemic recovery “having largely run its course” and the energy transition gathering pace, but it will still increase by about 1 million barrels a day, the IEA said.
“As long as the global economy stays relatively healthy, demand for these products steadily marches forward,” Wirth said, referring to fossil fuels.
Higher energy prices have been a major driver of global inflation since last year.
“It will have some effect on the economy, but we’ve had relatively higher oil prices here now for most of this year and certainly all of last year,” Wirth said. “The recession that everyone’s been talking about hasn’t arrived. The underlying drivers of the economy in the US, and frankly globally, remain healthy.”