Exxon Mobil CEO Rex Tillerson says the dollar’s weakness has added between $20 and $25 a barrel to oil prices.
Oil has hit a one-year high, surpassing $90. The dollar’s weakness makes investors worry about inflation, which in turn leads them to buy commodities like oil.
"If you look at what some of the currency effects are with the weak dollar, that in our view is contributing about $20 to $25 a barrel to the price,” Tillerson told CNBC.
As for supply and demand fundamentals, they aren’t very bullish for oil, he says.
"We’re well supplied with the market.”
Inventory levels are at historical highs, both U.S. and floating inventories, Tillerson pointed out.
“The market continues to be a bit soft. We see a little bit perhaps of firming demand. But I think it’s a little early to tell exactly whether that’s going to be sustainable."
Oil’s price swings have little effect on Exxon Mobil, Tillerson says.
“We kind of plan and look through this volatility,” he explained.
“We just test our plans across a range of prices, never getting too exuberant when prices get very high nor making too many steep adjustments when they get low.”
Energy industry legend T. Boone Pickens predicted at a recent conference that oil will surpass $100 next year, as production is maxed out at 85 million barrels. And he says $300 is possible in the next decade.
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