BOSTON -- A Massachusetts-based oil executive is boldly predicting that pump prices might fall to $1 a gallon in early 2009.

"The oil market is a manic-depressive market. It tends to overshoot," said Joe Petrowski, CEO of Gulf Oil.

Petrowski, who has been studying the oil business since the 1970s when he wrote his Harvard thesis, said that the price of oil could sink to $20 per barrel, WCVB-TV of Boston reported.

"The market overshot last summer on the high side. Oil never should have gone to $147, but it did and it can," he said.

Petrowski is betting that the slide in oil prices will continue to fall dramatically and overshoot on the low side.

"There is a better than 25 percent probability that we'll see oil go as low as $1 a gallon sometime after the first of the year," he said.

Gulf Oil, which is based in Newton, Mass., is not an oil producer or a refiner. The company is a wholesaler that distributes fuel through a network of 1,800 Gulf gas stations throughout the Northeast.

Dramatically lower gas prices would be quite a rebate check for consumers, Petrowski said. He said the drop may help ease the country out of the recession.

"The price of oil has a tremendous impact on discretionary consumer spending. I think it hurt us tremendously during July and August," Petrowski said.

That's when high gas prices prompted motorists to cut back their travel by 9 percent. But Americans are conserving as much as now.

"But long term, we need to have oil prices at an equilibrium price that will encourage new production, will encourage efficiency and will encourage alternative sources," Petrowski said.

He said he hopes that the motivation to create alternative energy sources will not be lost if pump prices continue to fall.