Davos WEF
Davos WEF

Chevron CEO sees no signs global economy is hitting a wall based on energy sales

Key Points
  • Chevron CEO Michael Wirth says the global economy is slowing down, but not hitting a wall.
  • Wirth's assessment is based on sales of energy and industrial products into sectors like transport, construction and mining.
  • Wirth says oil prices are approaching a level that attract investment in energy production but do not hurt consumers.
The most important factor in commodity markets is stability, says Chevron CEO

The global economy may be slowing down, but sales of energy and industrial products do not indicate that growth will come to a halt, according to Chevron Chairman and CEO Michael Wirth.

Financial markets are under pressure this week following fresh signs of a slowing economy. On Tuesday, the IMF knocked down its forecast for global economic growth. A day earlier, China reported its weakest annual economic expansion in nearly three decades.

Wirth says the slowdown concerns him because small changes to oil demand can tip the oil market into oversupply or deficit, resulting in volatile oil prices. However, he doesn't see major problems yet.

"We're not seeing signs that we're hitting any kind of a wall. Things may have slowed down a little bit in certain parts of the world," he said in an interview at the World Economic Forum in Davos, Switzerland on Wednesday.

"We sell our products into a number of sectors that have historically been pretty good indicators of economic activity — so construction, mining, transports — we sell lubricants and lubricant additives into industrial applications," Wirth told CNBC's "Squawk Box."

Michael Wirth, CEO of Chevron, speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.
Adam Galica | CNBC

On Tuesday, BP CEO Bob Dudley told CNBC he expects solid growth in demand for oil this year, despite concerns about the global economy. BP is currently forecasting annual growth of 1.4 million barrels a day. The world is expected to consume about 100 million bpd in 2019.

Oil prices are currently recovering from a precipitous drop to 18-month lows in the final quarter of 2018. The plunge came after a rapid rise to nearly four-year highs at the start of October.

Asked where he'd like crude prices to be, Wirth said what he really wants is stability in the oil market.

"Commodity markets, when they're volatile, they make it hard for investors to invest. It's hard on consumers, and so you really need a price that encourages investment and draws in enough new investment, but is not so high that it weighs on the economy," he said. "We're probably not far from that kind of a price right now."

International benchmark Brent crude prices were trading around $62 a barrel on Wednesday. U.S. West Texas Intermediate crude is holding above $53 a barrel.

Watch CNBC's full interview with Chevron CEO Michael Wirth