Exxon Sees Upward Price Pressure for Few Years on Lack of Investment

Exxon Mobil Corp. expects upward pressure on energy prices for at least the next few years due to tight global oil supplies with a lack of investment in fossil fuels according to an interview with Bloomberg TV last week.

• “The industry is still recovering from the impact of the pandemic, and the lower levels of capital that have been going in across the industry to offset the depletion that’s been happening,” said CEO Darren Woods. “Supplies are fairly tight.”
• There are few projects big enough to make up for the expected increase in oil demand this year and next year after OPEC+ cuts this year and with US shale forecast to slow in 2024. Prices will likely be set by demand with oil supplies unable to react quickly he added.
• “It’s really a function of where does the global economy go, because for the next couple of years it’s going to take time to get additional capacity coming on,” he said.
• The US economy is in “reasonably good shape,” China is seeing a “very slow emergence” from the pandemic and the European economy “is probably the most challenged” due to the loss of Russian gas.