If things go the way the CEO of Gulf Oil predicts, by the time of the holidays this year, the price for a barrel of oil could be half of the present $105 it is today, but don’t expect a stocking stuffer of half-priced gasoline.
The reason for oil to drop into the $50 range by year’s end, said Joe Petrowski on CNBC’s Squawk Box, is due to record amounts of natural gas and oil being supplied from the U.S. and Canada, as well as higher supplies from OPEC.
However, even if this does come to pass, the resulting gasoline still needs to be refined and transported at existing costs, he said.
Thus “$50 [a barrel] oil does not translate into $2 gasoline,” said Petrowski.
These things Gulf’s CEO said despite the fact that in the past three months gas prices have risen 14 cents on average and oil’s price has climbed 20 percent.
“Traveling is picking up, but we’re using much less oil. In fact, we’re using no oil in the energy sector. And, natural gas is taking a lot of the heating sector away,” he said while adding he did not think the rest of the economy would be adversely affected.