Gulf Coast refineries are best positioned to thrive long term because their geographic locations near the Gulf give them growing export capabilities, executives and analysts say.
As Fuelfix.com reports, refining companies—after a particularly strong 2015—are getting hit this year by cheaper gasoline prices, a warmer winter and weakening demand. But officials from Phillips 66 and others still expressed optimism for 2016 this morning at the IHS Energy CERAWeek conference in downtown Houston.
“We were not expecting that kind of (2015) demand growth,” says Horace Hobbs, Phillips 66 chief economist. “We’re not expecting two in a row, but we are expecting some solid demand growth in 2016, particularly in gasoline.”
He emphasizes that Houston-based Phillips 66 is well positioned near the Gulf and can ship gasoline to Latin America, diesel to Europe and gasoline components to China.
“Now, gasoline has become a global commodity,” Hobbs says. “We’re trying to build the flexibility … to make sure we can always access the markets.”
Phillips 66 also will complete is liquefied petroleum gas export terminal in Freeport later this year. The strong 2015 created long-term benefits for refiners because so many Americans bought trucks and SUVs when gasoline prices plummeted, says Cynthia Warner, executive vice president of strategy for San Antonio-based Tesoro.
The top three vehicle sellers for 2015 were Ford, Chevrolet and Dodge trucks, ahead of the Toyota Camry and Honda Accord.
“That’s a sticky phenomenon probably for the next 10 years at least,” Warner says. In November and December, Americans drove 4.2% more than the year prior, which was ahead of the 3.5% annual growth rate.
