Signs of a strong recovery in oil demand are emerging

Signs have started to appear in recent weeks that demand for oil is recovering and could rebound to higher levels in the second half of this year.

The oil market and forecasters have been expecting this last year rally since the start of 2021.

Currently, oil demand trends in different regions are mixed, with the situation in Europe being clouded by new lockdowns and chaos with vaccination programs in many countries.

But the travel and consumption patterns of the world’s largest oil consumer, the United States, and the world’s largest oil importer, China, point to a recovery in demand for petroleum products. These two countries, major consumers of crude, could pull global oil demand out of timber and lead the rebound in global consumption later this year.

Travel statistics show U.S. consumers are driving and flying this month at the fastest pace since the pandemic forced the United States into stay-at-home orders and shutdowns in March last year. Chinese demand for road fuels has returned to pre-COVID levels, with air travel also rebounding from last year’s lows.

Even in Europe, where lockdowns are still in place or have just been reinstated, signs have emerged from the UK that consumers will be boarding a plane to a sunny summer destination as soon as the UK eases restrictions. restrictions on international travel.

As recent months have shown, the recovery in global oil demand will not be linear, with unknowns regarding virus variants and vaccination passports. Related: Oil posts biggest one-day loss since April 2020

Nonetheless, data out of the US is encouraging for both car and air travel, while airline executives believe the recent surge in bookings could be the first real sign that the recovery is underway. .

Weekly U.S. gasoline demand in the week to March 20 seasonally hit pre-COVID levels, Patrick De Haan, head of oil analysis for GasBuddy, tweeted on Sunday. According to data from GasBuddy, U.S. gasoline demand on Saturday was up 9.5% from the previous Saturday, ending the week up 5.9%, and officially the first week of demand to top the week before. -COVID of March 8, 2020 by 0.18%, De Haan said.

Routing requests in the United States have jumped 53% since January 20, 2020, with the increase occurring this year, according to Apple. Mobility trend reports measure direction searches.

Additionally, figures from the U.S. Transportation Security Administration Pin up that more than one million travelers passed through US airport checkpoints for 10 consecutive days through March 20. While the numbers are still about half the passenger throughput compared to the same days in 2019, they were more than double the passenger throughput of March 20, 2020, when flights began to be grounded and people have stopped flying.

On Thursday, March 18, the TSA screened 1,407,223 people at security checkpoints. The last time throughput was this high was March 15, 2020, when 1,519,192 people passed through TSA checkpoints, said TSA public affairs spokeswoman Lisa Farbstein. tweeted Friday.

“We have seen some glimmers of hope over the past year, but they are false hopes,” said Delta Air Lines CEO Ed Bastian. The Wall Street Journal Last week. “But it seems to be real,” added Bastian. Related: Aramco’s 2020 earnings fell 44%

In the UK, where more than half of the adult population have now received at least one dose of vaccine, reservations for summer holidays in Spain, Portugal and Greece skyrockets in the days after authorities said summer could be the season to safely board a plane again.

“Tickets issued the week of the announcement, February 22, reached almost four times the volume of tickets issued the previous week. It is clear that consumer demand is patiently awaiting decisions from governments to take key actions” , Luis Millan, head of market research at travel analytics firm ForwardKeys, noted.

In China, domestic airline passenger numbers nearly tripled in February 2021 compared to February 2020, when flights were mostly grounded, Bloomberg quoted the local civil aviation administration.

Globally, with 81,442 commercial flights tracked on March 19, the world surpassed the same-day total of 2020 for the first time this year, according to global flight tracking service Flightradar24. noted.

Global oil demand may not return to pre-COVID levels by 2023, according to estimates from the International Energy Agency (IEA). Still, major oil-consuming countries such as the United States and China are showing signs of road and air mobility reaching levels not seen since the start of the pandemic, which bodes well for fuel demand. Summer travel and pent-up demand after months of shutdown later this year could prove the majority of analysts right who expect global oil demand to rebound in the second half of 2021.

By Tsvetana Paraskova for

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Felix J. Dixon