So demanding: US gasoline marketers zero in on potential future growth areas
Thursday February 25, 2016
You can’t take a practice swing with a 6-iron here at the BPAMA gasoline marketers’ convention in Doral, Florida, without nearly hitting someone who is optimistic about gasoline. Not crude, mind you. There is plenty of sour feeling about that. But about 450 regional fuel executives have gathered this week at the Trump National golf resort at Doral, with Platts as one of the sponsors of the event. (The attendees will miss the really big show, which happens in a few days when resort namesake Donald Trump is expected as part of his campaign tour.) Things are funny at the far end of the supply chain. Cheap gasoline has its champions. Sure, profit margins are smaller. But pump prices south of $1.50/gal are seen as a lure to get the folks out to the gasoline station on the way to far-flung adventures. Who knows, maybe it’s even time to take the family to that new Harry Potter thing in California. And if you buy a frozen-ice slush creation for 99 cents on the way, more power to you. Just keep it off the upholstery, Rusty. “It’s funny how lower crude is a good thing for us,” BP Fuels Chief Operating Officer Doug Sparkman told about 400 regional “jobbers,” the execs who buy fuel from the majors on the way to getting it into your tank. “There is a good story on the demand side. We don’t see $100/b oil in the near future, but we are bullish on demand.” Sparkman said growth in US gasoline demand will offset losses to stout fuel economy that will be required in US vehicles in the 2020s and 2030s. Also boosting demand: a shift to bigger cars. “The US is switching back to SUVs, and drivers are putting their hybrids up for sale, and you can count me as among the people who are happy about that,” Sparkman said. I thought that statement might need a reality check. Edmunds.com, which tracks vehicle sales, backed Sparkman up. (Edmunds is not at the conference in Doral.) “The data is very conclusive,” Edmunds analyst Jeremy Acevedo said. “SUV market share is at its highest ever level and our nation’s preference for utilities continues to grow. Hybrids and plug-ins have seen their market share tumble to the lowest levels since 2011. It’s important to note that in this SUV renaissance, the soaring popularity of more efficient compact SUVs are powering the segment to these record levels.” The one segment of the gasoline market where few are opt...