Gulf Oil CEO Joe Petrowski Says Market Supply Will Bring Oil To $50 A Barrel

CEO Joe Petrowski of Gulf Oil GURE thinks that oil will be around $50 a barrel by the end of the year. He explained why on CNBC's Squawk Box on Monday morning. "It's simple economics. We're producing record amounts of oil and natural gas in the United States and in Canada," said Petrowski. He went on to say that the supply/demand situation in crude and natural gas is the best he's ever seen. Petrowski said that it's more of a supply story than one of weak demand, meaning that an abundance of oil is leading to a somewhat saturated, and much cheaper market. Related: Chinese GDP A Relief For Brent Prices "It is simply more efficient cars and switching to alternate fuels," Petrowski said in regards to any dents that are seen in consumer demand, which aren't seen on the industrial side. Oil refinery margins will come under pressure, Petrowski said, but it won't be terrible. Petrowski did note that if oil went beneath $50 a barrel, then there would be added pressure to countries like Saudi Arabia, where they use oil revenues to subsidize the lives of their citizens and to exert control over them. Oil prices that are too low could potentially lead to political instability in such countries.