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Exxon Chief Says Oil’s Advance Reflects Weak Dollar

Bloomberg.com

By Fred Pals

June 16 (Bloomberg) — Rex Tillerson, chief executive officer of Exxon Mobil Corp., said the recent rise in oil prices reflects mainly the weak dollar and is not supported by market fundamentals.

“When you look at just fundamentals, there’s not a lot to support the kind of price movement we have seen, let’s say, in the last six weeks,” Tillerson, head of the world’s biggest oil company, said after a speech today at a gas conference in Groningen, Netherlands. Concerns about a weakening dollar and inflation had led some investors to bet on an economic recovery and try to get ahead of a rally, he said.

Oil was little changed today, with the contract for June delivery trading down less than 0.1 percent at $70.38 at 2 p.m. on the New York Mercantile Exchange. The dollar dropped against most of its major counterparts after leaders of Brazil, Russia, India and China considered reducing their dependence on the currency. Oil is up 62 percent this year and touched a seven- month high of $73.23 a barrel last week.

“Demand has not picked up,” Tillerson said. “Demand continues to be relatively flat or down, and inventory levels are still very high around the world, including floating inventory levels,” he said.

Tillerson was in The Netherland to attend the 50-year anniversary of the discovery of the Slochteren gas field. Exxon Mobil operates the field with Royal Dutch Shell Plc, Europe’s biggest oil company. The site has generated more than 160 billion euros ($221 billion) in revenue for the Dutch state, according to Maria van der Hoeven, the minister of Economic Affairs.

To contact the reporter on this story: Fred Pals in Amsterdam at[email protected]

Last Updated: June 16, 2009 14:20 EDT

Bloomberg Article

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