Rex Tillerson is unambiguous about what’s been driving oil prices lately.
“When you look at just fundamentals, there’s not a lot to support the kind of price movement we have seen, let’s say, in the last six weeks,” Tillerson, head of the world’s biggest oil company, said after a speech today at a gas conference in Groningen, Netherlands. Concerns about a weakening dollar and inflation had led some investors to bet on an economic recovery and try to get ahead of a rally, he said.
Although hopes about demand are abounding, the IEA last week was very careful to point out that a small increase in demand could be mostly due to restocking of chemical products. Saudi Arabia’s Ali Naimi may have been optimistic about demand rising at last month’s Opec meeting, but Tillerson does not buy it.
“Demand has not picked up,” Tillerson said. “Demand continues to be relatively flat or down, and inventory levels are still very high around the world, including floating inventory levels,” he said.
The six-week time frame Tillerson refers to would roughly cover the period when oil shot up from about $50 to about $70:
Exxon chief says oil’s advance reflects weak dollar (Bloomberg 16/06/09)
Speculation, and how high is too hig for the economy? (FT Energy Source, 11/06/09)
An oil-dollar signal? (FT Alphaville, 09/06/09)
Opec stirs oil speculators (FT Energy Source, 29/05/09)