Could oil fall to $50 a barrel by year's end?
That's the prediction of one industry executive, who adds that cheaper crude doesn't necessarily mean lower gas prices.
Oil and gas prices have been climbing, but at least one industry leader believes oil prices may soon make a dramatic drop.
Speaking on CNBC, Gulf Oil CEO Joe Petrowski said he imagines oil moving down to around $50 a barrel by the end of the year.Petrowski said the decline is simply a matter of supply. "We're producing record amounts of oil and natural gas in the United States and in Canada," he said. "The market's well supplied. In fact, OPEC supplies are higher. As the price goes down, those who are targeting revenue actually have to sell more oil to maintain revenue."
Other factors bringing down oil prices, according to Petrowski, are slowing demand in China, an excellent supply-and-demand situation with crude and natural gas, more efficient cars and the rising use of alternative fuels.
"Traveling is picking up, but we're using much less oil," he said. "In fact, we're using no oil in the energy sector. Natural gas is taking a lot of the heating sector away."
But Petrowski also emphasized that $50 oil will not translate into $2-a-gallon gasoline, because that oil still must be transported and refined. "The fact that we're relying on railroads and trucks to move product from refinery markets to consumption markets, rather than pipelines," he said, "is adding another 35 to 40 cents" to the per-gallon price of gas.
Petrowski said other issues that can sway oil prices are problems with refineries in the Chicago and Gulf Coast regions as well as continued political unrest in the Middle East, which could spread and adversely affect oil producers in the region.
Don't worry, the oil companies won't let that happen! They'll just make up some phoney reason to raise the price, AGAIN!!
We'll get a global recession if oil goes to $80 a barrel? If the U.S. population gets a huge relief at the pump, we'll have tons of extra dollars in our pocket. The opposite of a recession is what will happen.
"The fact that we're relying on railroads and trucks to move product from refinery markets to consumption markets, rather than pipelines," he said, "is adding another 35 to 40 cents" to the per-gallon price of gas."
OK, so $2.40 a gallon vs $3.75?
Whats with these experts? Every other day I hear different facts. Not enough drilling, too much drilling, There are refineries working at 75% and others shut down to keep supply low. Oil companies are their own superpowers,
The government should drill on government land and set the price of oil @$80.00 bucks /barrel.
Set-up a refineries at strategic locations incase oil goes through the roof! Maintain a set price that everyone is OK with. The Opec said they could live with 80 a barrel. Take the profits from the refinement and pay-down our debt. It is a win-win for everyone!
I guess that is to hard to understand that congress doesn't want our natural resources destroyed. I agree with that, but if you drill responsibly by the government, then they can only blame themselves if something goes wrong.
Again win win!
Stay thirsty my friends!
I don't buy that number for a minute. Nothing short of another recession will take prices that low... $50 is basically the incremental cost of supply where some production would be idled because it was unprofitable. If the most expensive oil only costs a little north of $50/barrel to produce, why does it currently trade for north of $100 as opposed to say $55? Because at $55 demand would seriously outstrip supply...
Oil has been north of $90 for so long because that's what price it takes to encourage all of these efficiency gains and to limit demand to the available supply. The global oil market is big and growing and can easily absorb extra US production without anywhere near the price drop he's talking about.
You will have lunch with Marylin Monroe before you get $50 oil. Supply & demand will prevail and consumption is high
right now and there is a lot of people that will hit the road since winter was extended this year almost until June 2013.
If the price of gas does not drop over-night with the price of oil then why does it rise with the price of oil over-night? The oil was bought cheap and refined and the new oil is not being refined yet so why does the price of gas go up when the cheaper oil is still in the gas station tanks? It because of F'N GREED by oil companies, making record profits and speculators on the stock market! It is time to bring back high taxes on corporate oil companies and speculators. They want to raid our pockets, well lets take it back. Use it to pay down our nations debt. It's our money they are stealing anyway. No more tax breaks! Time for our do nothing government to get off their dead asses and get to work representing "WE THE PEOPLE" and not the corporate giants that line their pockets with gold.
There is no problems in the Middle East impacting the production and shipping of oil. That's just WALL STREET BULL SH*T!
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