Former oil exec predicts 'severe recession' given the commodity is used in 'every product in our life'
Oil will hit $150 a barrel by the end of summer, said Joe Petrowski
Joe Petrowski warns a 'severe recession' should be expected in the coming months.
Joe Petrowski, former CEO of Cumberland Farms Gulf Oil Group, warned that a "severe recession" in the United States is imminent.
"I don’t think people understand how much oil goes into every product in our life, not only just in the shipping cost, but plastics and all sorts of derivative petrochemicals," Petrowski, who founded Mercantor Partners, a private equity group focused on downstream energy investments, told "Mornings with Maria" on Tuesday.
Former Cumberland Farms Gulf Oil Group CEO Joe Petrowski warns a "severe recession" in the United States is on the horizon. ( REUTERS/Lucy Nicholson/File Photo)
Petrowski also forecasted that West Texas Intermediate crude futures will trade over $150 a barrel by the end of the summer and the national average for gas will be over $6.
Gas prices hit a new all-time high on Tuesday, amid rising inflation and President Biden's restrictions on oil and gas production.
The national average cost of a regular gallon of gasoline hit $4.37 on Tuesday, the highest ever according to AAA.
The prices come as the European Union edges toward oil sanctions on Russia amid the Kremlin's invasion of Ukraine. It also comes as inflation sits at 40-year highs, with the consumer price index reaching 8.5% in March.
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The inflation data for April will be released on Wednesday.
"Inflation is not over," Petrowski argued.
Joe Petrowski, former CEO of Cumberland Farms Gulf Oil Group, argues that West Texas Intermediate crude futures will trade over $150 a barrel by the end of the summer and the national average for gas will be over $6.
When asked what is the best way to lower oil and gas prices, Petrowski said increasing supply and domestic production is the "simple" solution.
He then stressed that other measures taken by the Biden administration, including releasing millions of barrels of oil from the U.S. Strategic Petroleum reserve, is not achieving the goal of lowering prices.
Petrowski also slammed the idea floated by a Biden administration official to ban crude oil exports.
He stressed that the U.S. is "the world’s largest exporter of refined products" and "if we ban exports, oil prices are going to skyrocket."
Canary CEO Dan Eberhart stresses the need for policies that support increased oil supply to alleviate prices at the pump.
Critics claim that Biden's energy policies – restricting drilling on federal lands and blocking the completion of the Keystone XL pipeline – have created a "supply problem" in the market. Biden initially announced a moratorium on drilling on federal lands, but a federal judge in Louisiana blocked the moratorium after 13 Republican attorneys general sued.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND - USD ACC | 72.02 | -1.06 | -1.45% |
| BNO | UNITED STATES BRENT OIL FUND - USD ACC | 29.06 | -0.43 | -1.46% |
On Tuesday morning, oil prices fell, with West Texas Intermediate futures, the U.S. benchmark, trading at around $102 a barrel and Brent crude futures, the international benchmark, trading at about $105 per barrel.
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"Inevitably these oil prices have always led to a recession. That’s a 100% probability," Petrowski said.
"So I think the administration would be well-advised by their energy gurus to really focus on one issue and one issue only, which is build pipelines, increase domestic production."
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FOX Business’ Tyler O’Neil contributed to this report.