In a recent interview with CNBC, Gulf Oil CEO Jon Petrowski predicts that oil prices will fall all the way back to $50 per barrel, but that gasoline prices are likely to remain on the high side. Petrowski believes that the expansion of supply will lead to falling prices and put pressure on refiners like Tesoro (NYSE: TSO ) and Valero (NYSE: VLO ) . Given the costs of transporting refined product, the net effect on the economy is likely to be muted, although energy prices should stay contained due to natural gas supply.
In the video below, Fool.com contributor Doug Ehrman discusses the effects of falling oil prices without a corresponding drop in gas prices, and the waterfall of ramifications that would follow.
The shift in energy options is driven by the fact that record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza". Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.