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Gulf Oil CEO Joseph Petrowski on the factors leading to the rising price of oil and its impact on the U.S. economy.
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And all the -- to talk about that -- a great deal more we're joined now by the CEO of gulf oil -- atrocity Joseph great to have you with us.
Thanks preserving.
Joseph let's start with these prices are going up and an energy secretary says is job is not to keep prices down let me say at the outset to our audience.
That just about 12% of all disposable income that is all income for American consumers after they've paid taxes.
12% goes to energy.
That's sort of a strange thing for an energy secretary to say is -- -- it's it's it's is economically astounding.
But he would believe that.
Throughout history of the normal amount of GDP it's been a managing has has storm between 815%.
Everytime we've -- I've been up to the high end of the range where we are today.
We've had an economic recession or worse.
It literally takes away.
Disposal income for consumers and is extreme.
Drag our manufacturing and job creation.
There are those who would argue that the recession.
The deep recession of 2008 in the economic crisis was initially.
Started not by sub prime mortgages collapsing but almost a 150 dollar a barrel oil.
A number of economists have argued that.
We were not obviously looking at a 150 ever were to 107 as of tonight we've been above that Brent is well above that fifteen dollars about that.
You know we're -- a Smart enough for the time in no way but we watch our.
Our store sales every day in and -- way we saw things that happen on a retail basis would be.
-- people who would come in divide coffee in discretionary items.
Precipitously dropped.
We would see that -- gallons we -- -- go from eleven to seven.
I I agree actually Donald Trump the other day who said that he things.
The trigger to the in the financials -- collapse and always.
Were very high energy prices we're not there yet we've grown in the GDP of him out of 08 levels forward we're we're close we're close of them I would like does -- -- -- if we wanna sustain this recovery well.
And and for the consumer in this country looking at three dollars we're we're approaching three dollars and eighty cents a gallon sub like.
We have seen a a 10% grew 11% decline in demand since last year for gasoline products in this country we've got operating capacity in our refineries.
-- down slightly but not much -- 11 and a half percent.
I mean what in the world is going on here why are prices now moving higher -- -- that that's the question on the minds of every.
Consumer watch and right now.
We're.
World demand is up -- -- little question that demand for diesel particularly in China is extremely strong.
But there are three things that we can do that the -- -- energy secretary should look at.
Number one we have to move to greater differential.
Between domestic US crude of north decoder -- and in Canada -- sixty dollars a barrel -- on the coast is a 120.
That begs for infrastructure investment number two we have the biggest price spread history.
Between natural gas and oil we need some help bridging that graph GAAP.
And an encouraging transport fuel from natural gas and thirdly the amount of permits that this administration.
Has issued is 15% less than the Clinton administration.
-- issued we need to have more permits to drill.
Yeah without question and you know if you were when you talk about refining these products I mean we have seen this -- this is a dramatic shift to go to what net exporter.
Of petroleum products here.
Are we understand why it's happening anything you alluded to are just now.
These refiners are got to make money and they can find they can tag Brent rather than west Texas intermediate.
And they've got a better differential.
For export to form foreign markets rather than the US markets I got to make up for lower demand that's all good economics but the fact of the matter is.
We have to when we're working on a more demand in this country.
We're seeing far more fuel efficiency on the part of our automobiles.
What is your gonna take for everybody understand the American marketplace is going to take priority the American consumers gonna take priority.
And no matter what else happens whoever's elected president.
He had better understand that reality.
The question is not restrict -- boards are usually don't know what what -- -- I don't want you did not to suggest that because.
I didn't say that I wouldn't -- -- settings -- exactly the opposite.
At the beginning of the show I wanna see more oil exports I wanna -- her degree -- export.
But I want the American consumer to get a break on holding the largest reserves in the world I don't want anybody -- -- -- this on this.
Oh listen if we if we you really left the American industry.
American drilling industry refining industry do its job.
We can be a major exporter of satisfy domestic demand we once served the world MB to use.
In the fifties and that was the greatest period of manufacturing growth and job creation in the M and in this country.
Ever.
And and I know you have been not.
In favor of exports some on the right have not and and and that I don't -- quite understand it.
I wish we could export TVs and radios like we once did.
And -- a whole lot of other products just -- well -- with a cable.
-- for -- here it's great to have you with us come -- simply.
