Royal Dutch Shell PLC (RDSA) remains optimistic about the future of the oil price, despite its dramatic slump in recent months, Chairman Jorma Ollila told investors at the company’s annual general meeting Tuesday.
“Volatility is a fact of life in our industry. It is what it is and we have to manage through it. Short-term movements in oil prices can be driven by perception and prices tend to overreact,” Mr. Ollila said, adding that “we have not changed our long-term planning assumptions.”
Oil prices have fallen dramatically since June as a rapid increase in U.S. shale oil production coupled with lackluster demand created a market glut. The fall in prices has hammered big oil companies’ bottom lines and left them scrambling to cut costs and reduce spending.