Pat Dollard

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While the immediate effect on your daily/weekly budget it’s a good thing, in the long run will cheaper gas and oil mean the domestic drilling push will be pushed aside?

Any number of OPEC controls can change this revelry over cheaper gas in a heartbeat.

The fact is, while we continue to insist upon alternative fuels, the reality is we must have our current fuel sources … and we must provide our own so that we are not at the mercy of foreign companies and adding to their coffers that ‘fuel’ hate and terrorism against us and the Western world.

Gulf Oil CEO says gas could hit $1 next year

By Julie Onufrak – (The Patriot Ledger)

RANDOLPH — Gulf Oil CEO Joe Petrowski said on Wednesday that the price of oil could sink to $20 per barrel, and there is a chance gasoline prices could drop as low as $1 per gallon by early next year.

Speaking at a South Shore Chamber of Commerce breakfast at Lombardo’s in Randolph, the Brockton native said that after speculators drove oil prices up, there is a chance that the market will overshoot on the way back down, resulting in much lower prices at the pump.

Gas prices have already sunk fairly rapidly this fall, reaching a statewide average of $1.85 for a gallon of regular-grade gasoline this week, following a plunge in crude oil prices.

Gulf Oil, which is based in Newton, is not an oil producer. Gulf stopped producing oil in 1986 and stopped refining oil in 1992, according to Petrowski. He said the company is a “fuel agnostic” wholesaler, and will sell whichever fuels customers and distributors demand.

Though he said the company benefits from lower energy prices, he said he believes the price of oil should range from $40 to $60 per barrel, depending on economic activity, in order to keep pace with inflation.

Petrowski said that policymakers should make low-cost energy a goal by investing in alternative energy sources, increasing domestic oil reserves, and diversifying the foreign origins of oil so as to be less dependent on unfriendly countries.

While he said he believes global warming is a danger, Petrowski is not sure there is as much of a correlation between carbon and global warming as some environmentalists claim.

“Carbon is our greatest threat – there’s another myth,” he said. “I do think economic devastation and reliance on foreign supplies of oil (are).”

Since gas prices peaked in July, Petrowski said some people have resumed driving habits that they avoided when gasoline was $4 a gallon in the summer. But he said he hopes that the motivation to create alternative energy sources will not be lost.

Gulf opened its first E85 ethanol fueling station at Logan Airport in October – just as gasoline prices sank and the demand for ethanol decreased. “Ethanol’s not a great business right now, but it will be,” Petrowski said.

He said that cellulosic ethanol will eventually replace corn-based ethanol, and that he thinks the U.S. should eventually get rid of the import tax on ethanol from places like Brazil.

Petrowski said that New England’s energy future is bright, with research and development going on at local universities as well as access to gasoline from refineries in Canada, the mid-Atlantic region, the Caribbean and Europe. “We’re no longer at the end of the pipe,” he said.

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Oil plummets on dire US jobs figures

Oil prices slide as more bad US economic news darkens outlook for crude demand

VIENNA, Austria (AP) — Oil prices plummeted Friday as the already battered market reacted to unexpectedly high U.S. unemployment figures — the latest dramatic evidence of recession in the world’s largest market for crude.

With cold weather settling in parts of the U.S. and the rest of the Northern hemisphere, this time of year is normally bullish for the market. But the weak US jobs report added to the gloom spread by other dire economic data to counteract the usual trend for increased winter demand.

Skittish U.S. employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, according to figures released by the Labor Department Friday. As companies cut down on their work force, the U.S. unemployment rate bolted from 6.5 percent in October to 6.7 percent last month, a 15-year high.

“The damage to the economy by the financial turmoil is much bigger than the market initially thought,” said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo. “The economic data now is much worse than what we expected a few months ago.”

Light, sweet crude for January delivery was down $1.43 at $42.24 a barrel — nearly a 4 year low — in electronic trading on the New York Mercantile Exchange by afternoon in Europe after going as low as $42.05 on release of the jobs statistics. The contract fell $3.12 overnight to settle at $43.67, the lowest since January 2005.

“Baby it’s cold out there … on the NYMEX that is,” wrote trader and analyst Stephen Schork in his Schork Report. “Given how weak price action is there, last night’s 15 F (-9 C) temps in Chicago seem downright balmy.”

Oil prices have fallen about 70 percent since peaking at $147.27 in July.

Fresh dismal economic news Thursday in the U.S. also pointed to a sharp contraction of gross domestic product in the fourth quarter and weakening demand for crude products, such as gasoline.

The government said the number of people continuing to claim unemployment benefits last week reached 4.09 million, the highest level since December 1982, while the proportion of workers receiving benefits matched a level reached 16 years ago, in September 1992.

Factory orders plunged a bigger-than-expected 5.1 percent in October, caused by big cutbacks in demand for steel, autos, computers and heavy machinery. It was the largest decrease since an 8.5 percent fall in July 2000.

On Thursday, AT&T said it was slashing 12,000 jobs, or about 4 percent of its work force. Chemicals company DuPont said it will cut 2,500 jobs and media conglomerate Viacom Inc. said it will eliminate about 850 jobs.

“It could take a while before the economy and oil prices really hit bottom,” Emori said. “Oil seems headed below $40.”

In other Nymex trading, gasoline futures dropped more than 4 pennies to fetch 93 cents. Heating oil slid by nearly 3 cents to $1.48 a gallon while natural gas for January delivery shed nearly 26 cents to sell at 5.76 per 1,000 cubic feet.

In London, January Brent crude slipped by 72 cents to $41.56 on the ICE Futures exchange.