Exxon CEO: Oil Markets Are Well Supplied Despite Libya
March 09 2011 - 2:52PM
Dow Jones News
Oil markets are "well supplied" despite the unrest in the Middle
East and North Africa, the Chief Executive of Exxon Mobil Corp.
(XOM) said Wednesday.
Speaking to reporters after the company's analyst meeting in New
York, Chief Executive Rex Tillerson said crude prices, currently
trading over $100 a barrel, could only reach the levels seen two
and a half years ago over $145 a barrel if markets experience a
more significant supply disruptions than the one caused by the
political unrest in Libya. The current spike in prices is a
short-term reaction to the geopolitical risks markets see in Libya
rather than a fundamental unbalance between supply and demand, he
said. He added that Exxon Mobil has not seen either destruction in
oil demand and that consumers could start changing their behaviour
only when gasoline prices hit $4 a barrel a gallon.
"If you have a physical supply disruption that is significant,
something beyond Libya's volume, which was about 1.5% of global
production, then certainly you would expect that there could be can
a response in the price to that," Tillerson said. "I don't
anticipate that happening."
The head of Exxon Mobil said the company has had no problem
replacing the oil its Mediterranean refineries used from Libya with
crude from other areas and that the company has not heard of any
other buyer having problems either. "When we had to stop lifting
that crude to comply with sanctions, we had no difficulty finding
replacement crude volumes," Tillerson said. "Markets are well
supplied."
Tillerson said he is not "losing sleep" over the security of oil
supply or even over the company's own operations, but rather over
what is happening to the people in Libya.
Separately, the executive said he strongly disagrees with the
comments made Tuesday in Houston by Bob Dudley, the CEO of rival
European oil company BP PLC (BP, BP.LN), who said that improving
safety in deep water operations was an issue for the entire all
industry.
"I think those comments are great disservice to these industry,"
Tillerson said. "This conclusion that this is a major problem for
the industry is just wrong."
In a speech, the head of BP called for more collaboration among
energy companies in different areas where they face increasing
challenges, including their ability to respond more efficiently to
large oil spills. Last year, a rig drilling for BP in the U.S. Gulf
of Mexico exploded, killing 11 and unleashing the worst marine oil
spill in history.
-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207;
isabel.ordonez@dowjones.com
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