LONDON/NEW YORK (UK/US) – The surge in coronavirus infections has once again slowed the recovery of oil consumption in the US and other countries which are recovering from the lockdown. Analysts believe that it could take years before consumption rebounds.
Demand for oil across the globe dropped by a quarter when the lockdown was at its peak, prompting around 4 billion people to remain at home. The sudden decline in demand forced oil producers to go for record output slashes and pump hundreds of millions of barrels of oil into storage facilities.
As governments around the world relaxed curbs on domestic travel, fuel consumption and oil prices gained some ground.
With infections showing an upward swing in the US and major economies such as India and Brazil, the recovery is slowing down.
In the week which ended on July 11, US retail fuel demand witnessed a 5% fall from the previous week, said GasBuddy, which monitors real-time retail fuel purchases. This comes after several states re-introduced curbs to stem the spread of infections.
“Normally this two-week period would have been the peak demand period and we didn’t get it,” said John Kilduff, partner at Again Capital in New York. “The recovery has been unwinding.”
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field