New York billionaire and refiner John Catsimatidis is out with a new warning that soaring fuel prices and rising interest rates could produce a hard landing for the US economy. Catsimatidis warned last month about the diesel shortage on the East Coast, even suggesting the fuel could “be rationed this summer.”
Catsimatidis told Fox Business’ Dagen McDowell that the fuel crisis “will get worse” and said the Biden administration is steering the economy on a path towards recession, indicating this downturn doesn’t need to happen.
Biden’s “obsession” against “turning on North American oil spigots” has skyrocketed energy costs and inflation, he said, adding that the president has been begging Saudi Arabia and other countries for more crude production instead of increasing domestic production.
“We have 100 years’ worth of oil [in the US]. Let them [the government] open up the spigots and the price of crude oil will come back down to $55, $60, maybe $65 – half”, Catsimatidis said.
He explained it makes absolutely “no sense” to beg Saudi Arabia for crude at $120/bbl. He called on the president to increase domestic drilling.
“[Biden] wants to fly to Saudi Arabia and beg the Saudi Arabians to give us another half a million barrels at $120 a barrel… It makes no sense,” he added.
Catsimatidis spoke with McDowell on Monday as the national gasoline average at the pump inched closer to $5 a gallon.
Tightness in fuel supplies is worsening and has forced multiple banks, including Goldman Sachs (full note available only to pro subs), to revise the peak summer oil price target from $125/bbl to $140/bbl.
Goldman outlined demand destruction would be around $160/bbl.
Besides soaring energy costs (as well as rapid food inflation), Catsimatidis said he disagrees that the Federal Reserve’s aggressive monetary tightening is the right thing to do and could trigger a recession.
Catsimatidis left Fox listeners with this ominous warning:
“Somebody’s on the path to destruct America, and somebody’s got to say ‘guys, enough is enough’. You know what the cost has been to the American people because of the rising gas prices – the cost of the rising food prices – it’s going to go even higher with $120 oil”, Catsimatidis said.
Maybe history doesn’t repeat, but it certainly rhymes. Perhaps Catsimatidis is right. Soaring energy costs and rising interest rates are a perfect storm that could shock the economy into the next recession.