Chevron CEO Warns of Oil Price Risks Amid Depleted Safety Buffers
Chevron's CEO Mike Wirth warned that the oil market's safety buffers are running low, despite recent price drops. Speaking at an energy conference in Austin, Texas, Wirth said that the extra production major producers can bring online quickly when supply gets interrupted has largely been depleted.
This means that any new outage will be felt faster in 'prompt' barrels, the crude needed right now, which can push prices higher even if the day's tape looks calm. As a result, Wirth sees risks to the upside over the next few months, despite front-month WTI falling 1.9% to $100.51 a barrel and Brent dropping 2.6% to $104.87.
The depletion of spare capacity is a concern for markets because it tends to price a wider range of outcomes, leading to bigger potential moves in spot crude and more expensive short-dated oil options. This can also widen performance gaps across energy-linked assets, with integrated producers like Chevron looking relatively resilient if higher crude lifts cash flow.