A second wave of COVID-19 infections can swiftly put a brake on fuel demand which has experienced significant recovery in some of the world’s major cities in June. An industry survey showed that road traffic in those cities had returned to 2019 levels, but recurring coronavirus cases in some places prevent drivers from hitting the road again.
In China, Shanghai saw higher road congestion in the past few weeks, compared to the same period last year. However, traffic in Beijing slowed down again in June as the capital city reimposed containment measures in some areas due to a new COVID-19 outbreak.
London and New York experienced a steady increase in road traffic over the last few weeks, but it remained lower than pre-pandemic levels. Meanwhile, Moscow’s traffic had returned to a-year-ago levels, the survey showed.
Another survey of 15,000 fuel stations in the US showed that gasoline consumption declined by about 22% year-on-year in the second week of June, compared to a 50% year-on-year drop in the second week of April. Data from the US Energy Information Administration showed that overall fuel demand was down 17% year-on-year in the week ended June 19.
Gasoline refining margins increased to a more than two-month high of $4.70/barrel in Northwest Europe, implying a sharp rise in demand from April. European jet fuel use also showed signs of recovery. The global daily flights rose to 52,000 on Wednesday, from as low as 24,000 on April 12.
However, some analysts expect that jet fuel demand in China would not regain its pre-pandemic levels until the beginning of 2021. They also warned of a new wave of infections which could put demand under heavy pressure again.
