Exxon CEO says oil prices not yet hurting economy
Wednesday, March 9, 2011; 7:25 PM
NEW YORK -- Exxon Mobil CEO Rex Tillerson said Wednesday he doesn't think the recent jump in oil prices is hurting the U.S. economy - at least, not yet.
The head of the world's largest publicly traded oil company said that in 2008, when oil surged to near $150 per barrel, Americans didn't change their driving and spending habits until gasoline prices topped $4 per gallon. Average gas prices peaked at $4.11 in July that year.
"I don't know if that tip-over is still at the same $4 level or not," Tillerson told reporters at the New York Stock Exchange. "We'll see."
Oil is now about $104 per barrel after rising more than 20 percent over three weeks because of civil unrest in Libya. Tillerson hasn't seen any reduction in the demand for fuel from consumers or businesses.
The national average price for a gallon of gas has increased 40 cents to $3.52 in the same period.
Drivers on the West Coast are already paying close to $4, however, and prices are expected to rise through spring and summer.
Gas at $4 a gallon "creates some real challenges" for average American families and their household budgets. When the price rises above that, it's a "significant emotional event for a lot of people," he said.
"Even if you're paying $50 a month (for gas), $50 a month is significant for the way they have to manage their income."
Tillerson remembered that in 2008, many Americans switched to taking the bus or joining community carpools to save on gas costs.
Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said Americans forced to live paycheck to paycheck already are cutting back on driving. And not just in the West.
The difference between now and 2008 is that many motorists remember getting burned by high pump prices, Kloza said. They'll conserve now with the expectation that gasoline will hit record levels this year.
"I think they're wrong to assume it'll get that high," he said. Kloza has predicted the national average would peak at $3.75.