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Lower Oil Prices a Result of Global Economic Slowdown?

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    Former Shell Oil president John Hofmeister weighs in on oil and gas prices.

  • Duration 3:20
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And fifteen minutes but -- oil right now at a three month lows so its not only stocks that are going down our first guest Colin all of this a reaction to a global.

Economic slowdown of the fear of one.

Former Shell Oil president John half -- -- joins us now 9577.

For oil is also the founder of citizens for affordable energy.

Really gone down here pretty quickly does it continue -- It's a pretty big sell off obviously just within the last ten days or so.

You know I think people have just been turning bearish over let's say the last two months I think the jobless numbers are just very depressing to people.

I think the -- of -- of the political campaign in this country makes the country look leaderless.

And I think the worries over in Europe.

Particularly with the recent elections all these things combined and I'm all over the country almost all the time and everywhere I go there's a certain.

Just the bearishness about the outlook and I think that's finally caught up with the consumers across the country and the demand for oil is just slipping away.

The demand slipping -- as the economy slows it certainly a currency a story because of how bad things over.

In Europe are you weren't so.

And you're not the only one by the way -- you're -- five dollar -- gallon gasoline camp not that long ago and seem like a lot of people war and boy it does not seem like that will happen now.

You think.

Well it it again it all depends on the economy have made a few things can recover quick quickly enthusiasm could come back.

There could be any number of drivers that we that what happened that would help it along.

But yes a year and a half ago I was looking out into the for future with three plus percent growth.

I think that the nation does not achieve three plus percent growth.

Then it it just is going to be a laggard kind of an economy.

But at three plus percent growth plus China in the high single digits double digits that puts huge pressure on global oil supply.

It could return before the year is out if the economy perks up.

But you know trends never last very long -- high oil prices tend to drive lower oil prices and vice Versa.

Exactly now the to what happened though and our country.

Don't forget about Europe for a second but if you think about Europe and that maybe if that's the reason.

And this is largely a demand story both from -- and Asia but -- also currency story in Europe as the Euro weakens.

What happens in our country of gas prices don't get as high as we thought they will would be -- -- that at some point later.

To put the pendulum back in the other direction help the economy do you think.

Well I think the fact that people have more disposable income.

In their pocket could lead them to make more incremental purchases which could lift the economy a bit take down some of those inventories of the big box stores for example.

But as we would see economic growth.

The supply relationship to demand is so tight globally -- that there would just be an immediate perk up in the prices which then takes disposable income.

Away from the average consumer.

You're not brave enough to make another gas price reduction are you by the end of the year.

All I would I would say the that the economy -- -- to three plus percent growth.

Then we're gonna see gas prices work their way back up again it's just that tighter relationship write -- is tough to tell.

How about what a turn especially the recent economic data John thank you John half Muster with -- --

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