Saturday, Dec 27, 2008
The steep drop in oil prices may not be over yet, says the CEO of Gulf Oil.
While oil has tumbled more than $100 off its $147 a barrel high in the summertime, the price of US light, sweet crude could yet move as low as $25, and even $20 if current conditions persist, Gulf CEO Joe Petrowski said on CNBC.
“Oil’s got some more downside,” Petrowski said. “Whether it hits $20–could–but I think $25 is in the cards.”
Several factors are critical in the move lower, particularly the pressure set against traders in the oil markets, and the control sovereign foreign governments, as opposed to private entities, have exerted on the market since the summer price shock that sent gasoline prices at the pump above $4 a gallon.
(ARTICLE CONTINUES BELOW)
“They have a tendency to sell more on the way down, not less,” Petrowski said of the governments ruling the energy trade.
In all, he thinks those who believe oil is due for a rebound aren’t seeing the global economic factors that are playing into energy prices.
“There are things setting up in the oil markets that I think will give us lower prices, much lower prices, than we’re all expecting,” Petrowski said. “The down side is still well in gear.”
This article was posted: Saturday, December 27, 2008 at 5:52 am