Chevron CEO Mike Wirth: Demand for natural gas will be higher than expected

Chevron CEO Mike Wirth: Demand for natural gas will be higher than expected

so we are coming off of this big fall in the price of oil the jobs report came in weaker there are questions about the US economy what does demand look like right now globally demand’s still pretty healthy last year was the highest demand in the history of you know the oil industry this year demand will grow Again by probably a million and a half barrels a day so uh a new record and uh we see still a healthy economy here in the US uh China has gotten back on its feet uh Europe stabilized and so demand continues to grow coming back in China you think I I think China China has come out of the postco uh period of time now and we see pretty steady uh economic conditions in China versus a year ago certainly what about the supply Outlook do you expect any change from OPEC Plus in the second half of the year yeah it’s very hard to to know what OPEC plus will do they do have some capacity primarily in a couple of countries right now and uh they they’ve been very focused on uh you know stable markets and trying to be sure that uh uh we don’t see volatility and frankly although there are have been some ups and downs as you referenced prices have been within a relatively stable band here for the last several months and I think that’s what their intent is I wonder where you see prices relative to where you see the geopolitical risks today there’s news that Israel wants civilians to evacuate Rafa for potential Invasion into that area do you think the Market’s getting the the balance of risks right here as it relates to the Middle East War it’s always hard um until you look at it in hindsight to really know if the market priced the risk in if you look back at uh at the invasion of Ukraine the market priced in a significant Supply disruption which really never occurred we saw Russian barrels continue to come into the market maybe to different countries and different buyers but the market stayed well supplied uh in this instance um an incident in the straight of hormo really could change the physical supplies in the market and I think that’s that’s what’s a little different today versus a couple of years ago is you’ve got a conflict in an area that is really proximate to significant export capacity the world around Saudi Arabia The Straits of hormo one of the largest oil Transit choke points uh in the world and uh and if that were to be threatened or impacted then I think markets would have to respond so it sounds like you think the market is underestimating the potential risk here well I think the risks are to the upside uh We’ve certainly seen conflict between Iran and Israel back and forth uh the market began to anticipate a higher degree of risk but that pretty quickly settled out and um and I think a lot depends on the you know the course of events here uh we’re all hoping for uh an end to the the conflict uh but certainly as you say uh this evolves day by day yeah the other Hot Topic right now is natural gas and and I know AI is a big theme here at milkin and this idea that we could be looking at an electricity shortage and I wonder how it affects a company like yours natural gas producer key source of electricity and whether you can step in to fill the void well the US certainly has abundant supplies of natural gas in fact we’re exporting gas to our allies in Europe and and to customers in Asia right now from this country uh the move to Electrify everything whether it’s Transportation um Heating and and and uh industrial processes and now the increased demand from data centers all requires reliable and affordable uh Power Generation uh Renewables offer uh affordable power generation in some places with good wind and solar but data centers don’t shut down when the Sun goes down and so we need to have the ability to provide baseload supply for all of these needs I think natural gas will be a big part of that equation going forward and and it’s it’s a little hard to quantify right now because this is evolving so quickly uh on the AI side but I think demand for natural gas is uh is likely to be higher than what people have been estimating up until now so you you see it as a mix between Renewables and natural gas as electricity sources oh yeah I I think we’re going to see Renewables continue to grow uh we need to invest in the grid to be able to deal with that growth and the intermittency but we’re also going to need backup power for uh times when when you know Renewables are dealing with their intermittency and so uh coal plants are really on their way out in this country nuclear is expensive geothermal is less proven you come back to natural gas is the most likely source of that reliable Basel load Supply

Chevron CEO Mike Wirth joins ‘Money Movers’ to discuss the geopolitical risk to the oil sector, natural gas demand, and supply concerns.