Oil prices might be down on Wednesday, but that situation could be short-lived, according to Chevron CEO Michael Wirth, who spoke at the CNBC Evolve Global Summitt on Wednesday.

According to Wirth, the market is still tight, recession or no recession.

“The tightness in supply hasn’t gone away,” Wirth said. “I think it’s great for the economy that prices have moderated, but I also see the risks remaining skewed towards the upside.”

Oil prices slipped below $100 per barrel on Wednesday in volatile trade as the United States said that the CPI had risen by 9.1% over the last 12 months. In turn, this could lower the demand for gasoline and crude oil.

According to Wirth, the United States is already seeing some demand destruction on the backs of higher oil prices. On Wednesday, fresh EIA figures suggested that implied gasoline demand in the United States had fallen by 1.3 million bpd from the previous week. GasBuddy’s Patrick De Haan said that the huge demand destruction might not be from end users moderating how much gasoline they purchase, but rather on gas stations delaying purchases from wholesalers—holding out for more favorable pricing as the cost of gasoline continues to dip.

“Today’s EIA data showed a massive plunge in implied gasoline demand- stations may have really throttled back buying gasoline waiting for prices to plunge,” De Haan said on Twitter on Wednesday.

With supplies tight, and President Biden and the oil companies finding themselves in the crosshairs of high prices, Wirth said that Chevron continues to work with the U.S. government to raise output. According to Wirth, oil companies can increase production while investing to increase production and returning cash to shareholders. “We can do it all,” Wirth said.

By Julianne Geiger for Oilprice.com