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Oil prices are at a 7-year high, but Exxon CEO Darren Woods says the ultimate trend is lower


Darren Woods, CEO, ExxonMobil

Michael Newberg | CNBC

Prices for oil rose to $a seven-year high TuesdayThere are ongoing supply worries and tensions in Middle East. Exxon MobilCEO Darren Woods claimed that prices will eventually trend lower.

However, in the near future, the executive stated that the market can expect volatility prices while the industry recovers from Covid-19.

On Tuesday, he spoke on CNBC. “Squawk Box.”” Until the industry ramps up productions to meet growing demand or decreases demand, you will see more volatility before we achieve greater stability.”

Woods said that the market’s future balance is difficult to forecast given all the players.

West Texas Intermediate crude futuresOn Tuesday, oil benchmark in America, US, traded at $85.74 per barrel, an amount last seen October 2014. After briefly trading in negative territory between April 2019 and April 2020 due to the pandemic, the price has seen a rapid recovery.

International benchmark Brent crudeThe highest price for oil since 2014 was $88/barrel. While oil producers keep production at a minimum, demand is recovering and some are calling for the price to rise. $100 per barrelThis year.

Woods stated that he isn’t “overly obsessed” with high prices. The company’s focus when looking for new investments is to ensure that operations can compete in all price ranges.

“[W]We expect higher prices. Also, we anticipate volatility. He said that prices will drop as the future unfolds.

Exxon stated Tuesday that by 2050, it intends to have net-zero greenhouse gases emissions for all its owned assets. Exxon is under pressure from its board to change operations and announces similar targets. Engine No. 1, an upstart activist company, will launch in 2021. 1 has been successfully placed three of its candidatesOn the board of oil giant.

Scope 3 emissions do not count in Exxon’s goal. This refers to the environmental footprint of products and supply chains. Scope 3 emissions, which are the most difficult to quantify, tend to be the highest.

Exxon has made prior statements about how it will reduce its carbon emissions. Tuesday’s announcement builds upon those. It has also committed billions to developing emission-reducing technologies such as carbon capture.

Woods stated that Woods’ target is more than a promise and that there are clear plans for the company to reduce its carbon emissions.

Woods explained that there are roadmaps being developed in all of the facilities we have around the world. “These reductions will be delivered,” Woods added. This ambition will take us through 2030, and beyond. That should be enough to give people some hope. This is not just about putting a label on it, this is real work.

According to the statement by the company, it has identified over 150 possible steps and modifications that could reduce its emissions. This includes electrifying equipment as well as reducing emissions.

Wood indicated that future technological developments and market incentives could help reduce the costs of expensive decarbonization efforts.

Exxon is just one of a growing array of companies that pledge to cut emissions. Critics point out that there is no mechanism for enforcement at the moment, so some promises may not be true.

Exxon’s shares rose by more than 1 percent on Tuesday, to reach their highest level for more than 2 years.