Oil inventories are nearing "unheard of" levels that will lead to increased prices in the next few weeks, Neil Chapman, senior vice president of Exxon Mobil (XOM), said Thursday at the Bernstein Strategic Decisions Conference in New York.
"I mean, really, really low levels," he said, according to a transcript of the event. "You can debate whether that's going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you'll see price shoot up."
Dated Brent futures will rise to $150 or $160 per barrel when inventories hit their lowest, Chapman said. That will ultimately lead to demand destruction.
"Prices go so high, becomes unaffordable, and that's what happens," he said.
Rising crude futures naturally inflate the price consumers pay at the pump, but the cost of everything from fertilizers to plastics to food to will increase as oil prices climb, Chapman said.
"People think of crude oil as the source of gasoline. Well, of course it is," he said. "And people say, when crude oil goes to $150, gasoline price will be $9 in California, and that will be a serious issue. It's much, much more than that."
He added that crude is an important feedstock for many other products.
"Crude oil goes into virtually everything around us. Fertilizers comes from crude oil and gas. Food prices, they will reflect the absence or the lack. Plastics, everything you see in the world is plastics. Delivery. Amazon. Still a lot of trucks around the country are running on diesel. So the crude oil price impacts so many parts of society," he said.