June 27 - Global woes are helping keep energy prices low this summer, and Exxon Mobil CEO Rex Tillerson says there is room for them to go lower. Bobbi Rebell reports.
REPORTER INTRO: REUTERS REPORTER BOBBI REBELL (ENGLISH) SAYING: "Start your engines- Oil prices have dropped 25 percent since the beginning of May." That has prices at the pump deflating just as the summer driving season is in full gear- and they could go lower- according to Exxon Mobil's CEO Rex Tillerson: SOUNDBITE: REX TILLERSON, CHAIRMAN, PRESIDENT AND CEO, EXXON MOBIL (ENGLISH) SAYING: "I don't know how far it can go down, there is room for it to go lower." The Lundberg survey shows gas prices down 15 cents in just the last 2 weeks. Global woes are helping U.S. motorists: SOUNDBITE: REX TILLERSON, CHAIRMAN, PRESIDENT AND CEO, EXXON MOBIL (ENGLISH) SAYING: "Weak economic performance, particularly in Europe, China slowing down a little bit, but it's really the supply overhang. If you look back several months, the inventories have been building and building. And I think the inventories finally got to a level that several things kind of happened all at once. The markets are looking at the inventory number, they are looking at relatively more stable, perhaps regional outlook in the Middle East and this weak economic performance, sluggish in the US, and all that kind of came together and the market concluded: price is too high, So it started going down." And a new Reuters poll found an increasing number of analysts see Brent oil prices averaging below $100 a barrel over the next 2 years. At the New York Mercantile Exchange, crude oil prices were a bit higher on Wednesday, but that won't stick according to trader Cindy Wexler: SOUNDBITE: CINDY WEXLER, INDEPENDENT TRADER, NEW YORK MERCANTILE EXCHANGE (ENGLISH) SAYING: "I still think that the trend down is going to continue. There is nothing out there that tells me any other reason. We have problems in Europe we have problems in China. I mean the economy here is tepid at best. I don't see any reason that you would want to be long this market. Maybe short term we are a little bit oversold but long term I think we are going to head down." On the flipside- the price of natural gas prices- which has been trading around 10 year lows- jumped after Tillerson told a New York audience the low prices are unsustainable - and his company can't make any money at these prices. SOUNDBITE: REX TILLERSON, CHAIRMAN, PRESIDENT AND CEO, EXXON MOBIL (ENGLISH) SAYING: "What I can tell you is that the cost of supply is not $2.50.We are all losing our shirts today. You know we are making no money" REPORTER STANDUP: REUTERS REPORTER BOBBI REBELL (ENGLISH) SAYING: "He says world demand is going to go up by 60 percent in the next 20 or 30 years making it the fastest growing energy source in the world. Bobbi Rebell, Reuters