Oil prices rose to a seven-year high Tuesday amid ongoing supply concerns and escalating tensions in the Middle East, but Exxon Mobil CEO Darren Woods is confident they will trend lower.
Source: CNBC
In the immediate future, however, the oil executive said the market should expect volatile prices as the industry’s recovery from Covid-19 continues.
Woods added that it’s hard to predict when the market might balance out given the many players involved.
West Texas Intermediate crude futures, the U.S. oil benchmark, traded as high as $85.74 per barrel on Tuesday, a price last seen in October 2014. The price marks a blistering recovery after the contract briefly traded in negative territory in April 2020, as the pandemic sapped demand for petroleum products.
International benchmark Brent crude broke above $88 per barrel, also hitting the highest level since 2014. As producers continue to keep a lid on production while demand recovers, some observers have called for oil to top $100 per barrel this year.
But Woods said he doesn’t get “overly enamored” with today’s high prices. When looking at new investments the company focuses on ensuring operations can be competitive across a wide range of price environments, he said.
″[W]e anticipated higher prices. We also anticipate a lot of volatility. And frankly we’re anticipating lower prices as we go forward,” he said.
Exxon said Tuesday it’s targeting net-zero greenhouse gas emissions for its operated assets by 2050. The announcement follows similar targets from competitors, and comes as Exxon faces board pressure to act on climate change. In 2021, upstart activist firm Engine No. 1 successfully placed three of its candidates on the oil giant’s board.
Exxon’s target does not include so-called Scope 3 emissions — the environmental footprint from the products a company generates — or the company’s supply chain. Scope 3 emissions are typically the highest, and the hardest, to quantify.
Tuesday’s climate-focused pledge builds on prior announcements from Exxon on how it plans to cut its emissions. The company has also pledged billions of dollars to develop emissions-reducing technologies like carbon capture.
Woods said the target is “more than just a pledge” and that the company has a “line of sight” for how it plans to slash its emissions.
