By Melissa Vonder Haar
CHICAGO – Besides promising an uptick in the quality of hair
offered by speakers like Walter
Zimmermann and Todd Hale,
OPIS chief oil analyst Tom Kloza vowed to take retailers “beyond the screen” during
the “Motor Fuels Overview” general session last week at the NACS State of the
Industry Summit.
When it comes to the oil business, simply following the
futures market on CNBC, Bloomberg of Fox Business is not enough: Kloza said
“there’s a lot more than what meets the eye.”
For example while the U.S. Energy Information Administration
(EIA) would suggest that there was a .5-1% uptick in gasoline demand last year,
OPIS’ data suggests there was actually a 5-7% drop in demand compared to recent
years.
One possible reason for the discrepancy? Organizations like
OPIS and NACS (whose numbers also disagreed with the EIA projection) get their
data from actual retailers.
“I think EIA does a great job at most things,” Kloza said.
“But I think measuring volume by how much is leaving terminals versus how much
is actually being sold at stations is a bit of a fool’s errand.”
“It’s an uphill battle in terms of gas demand for the next
few years,” Kloza continued. “We’re challenged just like General Custer was
challenged the morning of Little Bighorn: these are some big issues we’re
facing.”
Some of the biggest fuel challenges include:
- Less Cars On The Road: The average recently
dipped to under two-vehicles-per-household.
- Less Income Spent On Gas: OPIS predicts household
income spent on gas will drop to $9 million in 2014.
- Better Fuel Mileage: Cars now gets an all-time
high average of 25.4 miles-per-gallon.
- Tech Advancements: From high-speed rail to even
more fuel-efficient (or hybrid) models, Kloza said “you have a lot of
technology that’s going to be adopted and really change gasoline demands in the
coming years.”
- New Car Boom: Yes, it’s good for fuel demand
that people are keeping their cars around for longer periods of time (averaging
11.4 year-old cars) — but Kloza points out that this means it won’t be long
before people trade in those old cars for newer, more fuel-efficient models.
- Population Decreases: Baby boomers are starting
to hit retirement age and there’s not enough drivers in the highly-desired
35-54 “sweet spot” to make up for that loss in fuel: over the next seven years,
the number of drivers in the 35-to-54 demographic will decline by 3.4 million.
It’s not all bad news: demand for traditional gas might be
going down, but diesel is on the uptick.
“Diesel demand is moving higher,” said Kloza. “I tell people
they should really have it, if they don’t already.”