With only two weeks left in 2016, one former oil executive has a hefty prediction regarding the price of black gold by the time the New Year arrives.
Recently, oil has been trading above $50 a barrel on optimism that an OPEC production cut will reduce the global supply glut.
Joe Petrowski, the former CEO of Gulf Oil and a self-proclaimed “bull on oil,” is forecasting that oil prices will rise even higher—to $75 per barrel by the end of the year.
“Demand is back in the U.S. rather strongly. World demand is up. There are supply problems, apart from the OPEC agreement,” he explained to FOX Business Network’s Neil Cavuto. “Venezuela is a basket case. Mexico’s production is falling off the cliff. Russia is struggling to meet production quotas. China’s demand is strong and their industry needs a lot of capital to develop their shale formations, especially in the South China Sea.”
Petrowski expressed concern about the state of independent refiners in the United States, which he says have been negatively impacted by renewable fuel mandates.
“Most of the refiners have gotten out of their downstream distribution, so the small and independent refiners—like Philadelphia Energy, PBF, Western Refining— are all in trouble,” he said. “And we need more refining capacity in the United States. So I think that will have its effect on refining margins and on refined products, which would be stronger.”
The former oil exec also commented on speculation ExxonMobil CEO Rex Tillerson could be President-elect Trump’s choice for Secretary of State. Tillerson has come under fire from both liberals and conservatives for his reported ties to Russia.
“Yes, he’s met with the Russians a lot and he’s dealt with them, but I find that to be a positive,” Petrowski said. “I know Rex and he will take on Russia. I think, unfortunately, he’s in a difficult position because I’m sure the left will kill him no matter what he does.”
He added: “If he takes sanctions off of Russia [then] they will accuse him of trying to benefit Exxon. If he leaves sanctions on, Russian production will collapse in a few years. It’s already on a slippery slope because of the sanctions, and they need lots of capital to keep their industry going… I think he’ll do what’s in the interest of the American people.”