Global oil supply is sufficient – US ExxonMobil CEO

09 March 2011 20:50  [Source: ICIS news]

NEW YORK (ICIS)--Despite high crude oil prices, supplies are sufficient to meet customer needs in the near term, the CEO of US-based energy giant ExxonMobil said on Wednesday.

“Physically there is no supply shortage. All supply requirements are being met,” said Rex Tillerson, chairman and CEO of ExxonMobil at the company’s analyst meeting at the New York Stock Exchange.

“We don’t know anyone with difficulty supplying to their customers, and are not concerned about the ability of producers to meet demand in the near term,” he added.

Tillerson said oil prices are being driven by the risk premium attached to turmoil in the Middle East.

“Libya is only around 1.5% of global production, but if we had a significant supply disruption elsewhere, then it’s possible we approach 2008 price levels,” he said.

Crude oil prices peaked in July 2008 at $147/bbl (€106/bbl).

The CEO noted that there has not been demand destruction from higher oil prices thus far, but that $4/gal gasoline in the US could become such a factor.

“The last time we had $4 gasoline [in 2008], it had both an economic and psychological effect. People made serious changes to their buying patterns,” said Tillerson.

“We don’t know what the tip-over level would be this time, but this was a significant emotional event,” he added.

($1 = €0.72)

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