US petroleum demand tumbled last week amid surging coronavirus cases, setting the scene for a lacklustre Thanksgiving holiday period where more American motorists opt to stay home.
Petrol demand fell by 6 per cent in the seven days to November 13 to 8.3m barrels a day, according to data released by the Energy Information Administration.
“What you’re seeing is, in response to Covid, people are staying closer to home and celebrating with fewer people,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “It’s going to be a quiet Thanksgiving this year.”
A fresh surge in coronavirus cases across the US has forced people to dial back their movements once again as state authorities impose new restrictions on travel. There were almost 156,000 virus cases reported in the US on Tuesday, according to the Covid Tracking Project, compared with about 43,000 two months ago.
That has hit travel patterns over the holiday period. Last year two-thirds of Americans took to the roads to celebrate Thanksgiving with family and friends, according to a GasBuddy survey. This year the figure is set to be less than a third.
Petrol demand was about 10 per cent lower last week compared with the same period last year, according to the EIA data.
The latest decline comes after consumption had ticked up 5 per cent, week-on-week, in the previous seven days, stoking optimism in the market that drivers were returning to the roads.
But overall traffic has been in decline since the end of the summer driving season in August, according to Bernstein Research, dragging on crude demand.
Air travel, another important segment of the oil market, has remained subdued as international travel has failed to recover from the blow dealt by coronavirus. Jet fuel consumption fell by a quarter last week, according to the EIA.
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Oil prices were steady after the EIA’s release, which showed that commercial crude stocks rose by about 800,000 barrels, a smaller increase than the market expected. They remain well above historical averages.
Much now depended on how quickly a vaccine could be distributed in order to get people back on the roads, analysts said, with demand likely to slip below 8m b/d in January and February — the coldest months, when Americans always tend to hunker at home.
The vaccine rollout, said Mr De Haan, was the “golden ticket in getting the economy back to normal”.