Exxon CEO Rex Tillerson: Falling Crude Oil Prices Means Just A Return To Fundamentals For Us
With prices of oil falling,oil companies are suffering. However, big integrated oil companies like Exxon Mobil Corporation (NYSE: XOM) are better prepared to face this challenge than its smaller counterparts and that’s perhaps why stock of Exxon Mobil have held its ground better than other oil companies.
Rex Tillerson, chairman & CEO of ExxonMobil, on Wednesday was interviewed by CNBC, in which he discussed how cheap oil prices are impacting his company and how prepared Exxon is for the scenario where crude price remains low in the future.
“Well, it’s not the first time we've been through a price correction. For a lot of our younger people, this will be their first experience to go through a commodity price correction, but it really means just a return to fundamentals for us. It’s important about watching your cash, watching your investment decisions, being very disciplined about everything and then looking for opportunities that might present themselves in an environment like this,” Tillerson said.
“If you look at the reasons for the price correction, it's been at the fundamental supply-demand. Demand this year from last year is up fairly modestly, about a million barrels a day globally, but if you look at the demand in United States it’s flat, demand in Europe is down and has been down for a couple of years, Japan is down.”
“So, very modest demand growth of about a million barrels a day plus or minus, in the face of a pretty significant supply growth driven by North America," Tillerson said. "Last year or this year we will add about 1.6 million barrels a day of new supply from non-OPEC areas... So you take 1.6 million barrel a day supply growth and you put it on top of one million barrel a day demand growth, you have got a surplus of capacity ”
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