Chevron CEO: Oil Industry Won’t Quickly Fix Capacity Crunch

The oil industry won’t quickly overcome the pervasive capacity constraints that have underpinned the huge increase in oil prices over the past two years, Chevron Corp. (CVX) Chief Executive David O’Reilly said Tuesday.

While prices are now extraordinary and demand high, the industry suffered nearly two decades of equally pervasive overcapacity, O’Reilly said. Prices will have to remain high for some time to persuade investors that the industry is worth their time, he said.

“This is a capital intensive business, and these are multibillion dollar investments,” he said. “It’ll take time and sustained belief that this is a good business to invest in for some of that to grow back.”
DowJones Newswires via iWon