Chevron Corp.'s CEO Mike Wirth spoke with Bloomberg on Wednesday and warned about elevated prices due to tightening supply. He said oil and gas companies are holding back on drilling new projects.
"There are things that are interfering with market signals right now that we haven't seen before. Eventually, things work out, but eventually can be a long time," Wirth said.
His outlook for the energy market, including gas, liquefied natural gas, and oil, is a bull trend in prices "for a while," without laying out a timeframe.
He said although commodity prices are moving higher, "signaling, we could invest more," equity prices are sending mixed signals.
"There are two signals I'm looking for, and I'm only seeing one of them right now," he said. "We could afford to invest more. The equity market is not sending a signal that says they think we ought to be doing that."
Wirth added that shareholders would rather see cash returned to them than invested in new or existing drilling projects. Investors are cautious about plowing billions of dollars into low-return projects. They are also concerned about climate change initiatives targeting energy companies to reduce carbon emissions that would hurt future returns.
"You've got some real new dynamics, whether it's government policy, efforts to constrain capital into the industry, to make it harder for the industry to access capital markets," Wirth said. "That is the short term could create some risk for the global economy."