Chevron CEO Mike Wirth told Bloomberg that the price of oil "probably is headed for the $100 mark soon amid tightening supplies."
Production reductions from Russia and Saudia Arabia have West Texas Intermediate (WTI) trading above $90 per barrel, while the global benchmark Brent Crude is hovering at $94 per barrel.
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"We’re certainly moving in that direction," Wirth said in a Bloomberg Television interview earlier this week. "Supply is tightening, inventories are drawing, these things happen gradually, and you can see it building. The trends would suggest that we’re certainly on our way, we’re getting close."
The Chevron exec also predicted oil would hit $100 per barrel in January last year due to geopolitical risks when crude prices were under $87. A barrel of oil topped $130 by March after Russia invaded Ukraine.
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While the Chinese recovery this year has been slower than many expected, it’s now "coming back" and is "one of the reasons why you’ve seen crude oil prices tightening," Wirth added.
A move back above $100 for an extended time would boost revenues for members of the Organization of the Petroleum Exporting Countries (OPEC), whose economies rely mostly on oil, while obstructing industrialized economies working to cool inflation and lower interest rates.
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"Higher energy prices have a significant impact on headline CPI, and we expect these pressures to flow through to other aspects of inflation in the coming months," Senior Investment Director of Asset Allocation at NEPC Jennifer Appel told FOX Business. "A sustained uptick in inflation resulting from gasoline prices will complicate the Fed’s efforts to curb inflation and may introduce an upward bias into interest rate expectations." The Federal Reserve will announce its decision on interest rates Wednesday at 2 p.m. ET.
To support the market, the countries and allies, including Russia, agreed in October to cut production by 2 million barrels per day, about 2% of world demand.
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Reuters contributed to this report.
