The recovery in U.S. gasoline consumption is receding. A few weeks ago, it seemed that demand for fuel was gaining momentum as people used cars to go to work in order to avoid public transport. However, the situation is already different and brings concern to the oil industry.
According to Bloomberg, the recovery was expected to help boost global oil demand back to pre-pandemic levels by the end of the year. Now, the optimism of experts is already starting to wane: "Covid is holding back the demand clock," said Robert Yawger, director of mizuho securities' futures division.
He added that U.S. gasoline consumption over the next six weeks will determine the short-term future of the global oil market. "Look what happened: we saw demand level in mid-July. That's the peak of the holiday season. That's not where things should be based for what we know. This can be bad," he said.
If gasoline demand falls, the need for the plants themselves to buy oil will also decrease. In addition, another crucial point is aviation fuel that still remains well below peak levels. With less demand for fuel, refineries have shifted production to other fuels, such as diesel, putting pressure on these markets.