Investors concerned about relatively weak oil prices got a boost Tuesday from comments by Chevron (CVX 2.56%) CEO Mike Wirth. Making rather bullish statements about both the energy business and the broader macroeconomy, the Chevron leader managed to reassure investors about the company’s current state.
Investors were bullish on Chevron’s future, as the stock closed up by almost 3%.
Waxing positive
In an interview with CNBC, Wirth stated emphatically that the economy is not in danger. This, despite widespread fears of a recession being triggered by the current, at times bitter, trade disputes between the U.S. and a clutch of its key trading partners.
The Chevron leader asserted, “There’s no signs that we see at this point that we are in or close to a recession.”
He conceded, however, “There are signs that growth may be slowing and we have to always be prepared for that.”
Wirth’s assertions come on the heels of a growth estimate cut from the high-profile International Monetary Fund (IMF). On Tuesday, the organization reduced its 2025 projection for the U.S. economy; the IMF now believes it will grow by 1.8%, representing a significant chop from its previous 2.7% estimates.
A reasonable take on the situation
In terms of Chevron’s business, Wirth predicted demand will continue to soften due to the American tariffs combined with OPEC’s decision to accelerate oil production. Yet this shouldn’t have a drastic impact, as Chevron is maintaining its current capital spending strategy.
Obviously, Wirth and other top energy industry executives have a vested interest in staying positive through the current situation. Like him, I don’t think the industry is near a crisis point yet, and believe it could even bounce back sharply if the tariff war is resolved reasonably, and soon.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
