The oil market is over-supplied, said Joe Petrowski, the CEO of Gulf Oil on Thursday. As oil stocks approach a 29-year high, the fundamental supply-side of the market has never been more bearish, he said.
"It will be almost impossible for gasoline prices to go up," he said. “We’re seeing a lot of resistance as prices get to $3."
The company’s Cumberland Farms, which serve over one million customers a day, for instance, saw their average gallon go from 11 to 8 in addition to declining inside ticket sales.
"The consumer is stressed here," said Petrowski. “Things on the retail level: switching to lower price products; going away from premium products; the average amount of gallons you sell per fill-up dropping."
The only danger to the upside, he cautioned, would be a financial collapse to the dollar or a massive shift from ETF funds into crude as an inflationary currency hedge.
"The Chinese hold aobut 1.5 trillion of US T-Bills. People forget that a five percent shift in [T-Bills], just by the Chinese, never mind the rest of the world, into crude and products is more than the open-interest on the NYMEX future exchange,” Petrowski said.
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