John Hofmeister and the $5 retail gasoline prediction

On the December 26 edition of Platts Energy Week, former Shell Oil CEO John Hofmeister predicted that retail gasoline prices would hit $5/bal by 2015.

Mr. Hofmeister, who in his post-Shell career, has given hundreds of speeches regarding his views of where prices are headed. He’s done so in his role as head of Citizens for Affordable Energy, a group he formed following his retirement from Shell Oil, which is the US arm of Royal Dutch Shell. As word of Mr. Hofmeister’s $5 prediction on Platts Energy Week spread, this week he has
become a media star. He has been on the CBS Morning Show, the CBS Evening News, Parker/Spitzer on CNN, and so on. No doubt about it; his five bucks forecast has gone viral.

As a result, we here at Platts have been asked to also come on various media outlets and respond. Platts does not forecast per se, but $5 retail gasoline would take crude oil prices at somewhere either side of $180/b, depending on crack spreads. Even the most bullish Wall Street forecaster — Barclays — only sees $150 by 2015.

But regardless, whether it’s $150 or $180, these are not coming from the voices of peak oil
analysts. They are the voices of mainstream energy experts who see a tight supply/demand balance in the coming years.

You can see one of our media responses to Mr. Hofmeister’s prediction here, from Platts Director of News John Kingston.

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