Shell CEO: Why Oil Will Get Cheaper

The CEO of Shell says that despite all the speculation, there is no physical shortage.

Shell CEO Heroen van der Veer was calling the drop in oil prices even before it began last week. An oil-industry veteran who is not given to rash predictions, he spoke recently to NEWSWEEK’s Rana Foroohar about the industry’s most pressing questions, including oil nationalism, security and those threatening prices. Excerpts:

Foroohar: Are current prices sustainable?

van der Veer: There’s no point in predicting the oil prices, because it tends to be a pretty bad prediction. Why is that? Because there are so many factors at play. What I will say is that [recent data] shows that crude-oil stocks in factories around the world are very normal or even better than normal. It’s a bit of a mixed picture, but by and large, there is no physical shortage in the world. So there must be two reasons [for current prices]: geopolitical tensions in the world and the amount of nontraditional money like hedge funds moving into the oil market.

Newsweek