Phillips 66, the second-largest US oil refiner, anticipates a continued increase in global demand for motor fuels, despite a leveling off in the US gasoline market. The company, which exports gasoline, diesel, and jet fuel worldwide, expects global fuel demand to rise by about 2% annually. CEO Mark Lashier highlighted the strong fundamentals for refining during a press briefing.
Following a dip in gasoline demand due to inflation last year, Phillips 66 projects US pump prices to hit their highest level since mid-2022, reaching $4 a gallon as forecasted by AAA. The company remains optimistic about the resilience of the US and global economies, noting an uptick in trucking activity.
Phillips 66 is also addressing strategic and governance issues brought up by Elliott Investment Management. After revealing a $1 billion investment in Phillips 66, Elliott, led by billionaire Paul Singer (Trades, Portfolio), suggested that the refiner could enhance its stock value by 75% through a greater focus on refining among other strategies. Since then, Phillips 66's stock has seen a one-third increase, though it still lags behind competitors Marathon Petroleum Corp. and Valero Energy Corp. in year-to-date performance.
CEO Lashier, who will also take on the role of chairman before the company's annual meeting in May, has a long history with the company, starting in 1989 as an associate research engineer. Phillips 66, which was spun off from the oil explorer in 2012, is in the midst of executing a 2.5-year plan aimed at returning up to $15 billion to shareholders through cost reductions and performance enhancements.
