Chevron Do not see indications that the United States is close to a recession even if President Donald Trump's prices weigh on the expectations of oil demand, CEO Mike Wirth said on Tuesday.
“There is no sign that we see at this stage that we are in or near a recession,” Wirth told “Squawk Box” from CNBC. “There are signs that growth can slow down and we must always be prepared for this.”
The International Monetary Fund reduced its growth prospects for the United States on Tuesday to 1.8% on Tuesday, compared to 2.7% before.
The oil market expects a reduction in demand due to Trump prices and OPEC + decision to increase production faster than expected, Wirth said. Chevron does not change its capital expenditure plans in response to a drop in prices, said the CEO.
US crude crude oil prices have dropped by about 11% since Trump announced his prices on April 2. West Texas Intermediate was the last up to about 72 cents at $ 63.80 per barrel. OPEC and the International Energy Agency have reduced their demand prospects for this year.
Wirth said that American Oshore oil production in patches like the Permian basin is likely to back up if prices reach $ 60 a barrel. Offshore production will probably not be affected, he said.
“This is an area where if we were to be at a price of $ 60 or even more, you will probably see the activity withdraw this sector and you will see the production response over a few months,” Wirth said. “This is what we have to look at, not so much the activity in deep water.”
Chevron does not expect a major direct impact on its activities of Trump prices because the energy has been largely exempt from the samples, Wirth said.
“The effects we feel likely to be more the macroeconomic effects when they cross the economy,” Wirth said. “The greater problems would be what it would mean for growth, world trade and how it changes.”
The leaders of oil and gas companies were tightened in their criticism of Trump prices in an anonymous survey of Mars by the Federal Reserve Bank of Dallas, warning that steel rates increased their costs and that low prices could have an impact on their activity.
Correction: The International Monetary Fund reduced its growth prospects for the United States on Tuesday this year. An earlier version disturbed the day.
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