BOSTON (CBS) – Another familiar name in the gas station business is about to disappear.
Hess Corporation has decided to leave the retail market, following pressure from one of its biggest shareholders to break-up the company.READ MORE: Car Crashes Into Saugus Building, Leaves Hole In Brick Wall
WBZ NewsRadio 1030’s Anthony Silva reports
Hess spokesman Jon Pepper tells WBZ the company the company is divesting what he calls its downstream businesses. That includes Hess retail stores, its energy marketing and energy trading businesses.
Hess will eventually close or sell off its gas stations from New England to Florida.READ MORE: To Do List: Adult Brain Games, Beer Garden, Dinosaur Drive-Thru
So what happened at Hess? Raymond James oil analyst Pavel Molchanov says this is the logical conclusion of a process the company has been going through. He says not only are profit margins in the retail business slim, but the growth is minimal.
“The United States has had shrinking oil demand for five of the last six years,” according to Molchanov.
He expects that trend to continue through the end of the decade, because of things like more efficient engines and more electric vehicles. Molchanov adds that people are more conscientious about driving long distances. He says for refiners and fuel marketers, there’s very little growth left.MORE NEWS: Police Investigate Reported Shooting In Peabody
Molchanov says Hess will pour most of its investment into the more lucrative business of energy exploration and production.