When attending any conference, one typically has a few sessions that are must-attend, top-of-the-list priorities. For this year’s Best Practices for Oil and Gas, the presentation by Horace Hobbs, the Chief Economist at Phillips 66 seemed to be that can’t-miss session for just about everyone.
With a full audience in attendance, his topic centered on the economic outlook of the energy sector, which is one of the top discussions trending within the community. Here is an overview of this highly anticipated session with the main highlights from Horace’s economic predictions.
SESSION: An Economic Outlook of the Energy Sector
PRESENTER: Horace Hobbs – Chief Economist, Phillips 66
“Probably the best keynote of the whole event. Very insightful” Luis V., presentation attendee
KEY TAKE-AWAY 1: Current Economy of the United States
- Stock valuations and confidence are higher, but private sector outlays remain cautious
- Trade is gradually increasing
- Full employment with low labor participation rate
- Inflation is on the rise, allowing for interest rate normalization
- Overall stable economy with significant policy uncertainty
KEY TAKE-AWAY 2: US Driving Trends
- Driving vacations on the rise
- Estimated additional driving 2016 vs. 2013 per licensed driver: 890 total miles
- + 200 miles for recreation / leisure
- + 80 miles for employment growth
- + 50 miles for suburban date night
- + 560 miles (11 miles /week, or 30 minutes /week)
KEY TAKE-AWAY 3: Resource Abundance = Market Scarcity
- Last era of abundance: 1950’s
- Last 40 years of U.S. investment defined by resource scarcity
- Refinery investment driven by feedstock availability
- Logistics infrastructure investments driven by imports
- Next 20 years defined by resource abundance
- Investment driven by market needs
Each of the aspects highlighted influence the global energy landscape. Outside of the US predictions, Horace also touched on global trends, including both macroeconomic indicators and shifting growth. Additionally, by understanding the fundamentals behind supply and demand, Horace explained gasoline demand drivers and changes in consumer behavior and buying trends—such as electric vehicle market penetration.
Although most of this deeply analytical content could be difficult to understand to any non-finance expert, Horace did an excellent job of relating examples to the average American lifestyle. Combining a bit of humor by poking fun at millennials, the audience was highly engaged and truly enjoyed his speaking style.
“Fascinating talk and an insightful look at the industry and the trends.” Jerine C., presentation attendee
Closing his predictions, Horace concluded with the shifting outlook for global energy consumption and resource abundance then, in turn, what that means for all the players in the global energy supply chain. To hear more insightful predictions for the energy industry’s economy, plan to attend next year’s Best Practice’s for Oil & Gas conference, moving to San Antonio, Texas!