MOSCOW (MRC) -- European and US gasoline stocks have fallen to near pre-pandemic levels as Western holidaymakers hit the roads, but the end of the driving season and the spread of the Delta variant of the coronavirus could slow the recovery in global oil demand, reported Reuters.
The pandemic and resulting lockdowns around the world destroyed demand for oil products and led to massive stock builds in 2020 which have been gradually depleting this year.
The International Energy Agency said on Thursday that global oil demand surged by 3.8 million barrels per day month-on-month in June, led by increased mobility in North America and Europe, but reversed course in July and is set to proceed more slowly for the rest of the year due to the spread of the Delta variant.
"International travels are restricted so everyone is travelling by car. It is really a car-driven recovery that is pulling road fuel inventories down," said Cuneyt Kazokoglu, head of oil demand analysis at FGE.
World gasoline demand in June was only 3% lower than the 2019 average, according to FGE's estimate, and demand in the United States, Europe and China has either largely recovered or exceeded 2019 levels.
"Government regulations and restrictions are the main obstacles for demand recovery at the moment. Whenever they are lifted, we see pent-up demand and a strong recovery," said Kazokoglu.
Successful vaccination programmes in North America and Europe - with around half their populations fully inoculated according to Our World in Data project - meant easing restrictions and faster and steeper fuel stock drawdowns West-of-Suez than in the East.
Fuel stocks in Asia, where only around 30% of people are fully vaccinated, remain elevated overall as a rapid rise in COVID-19 case numbers in parts of the continent leads to new curbs on movement.
The United States consumes about a fifth of the world's oil, almost half of it as gasoline and it is here that the inventory decline has been largest. US gasoline inventories fell to 227.5 million barrels last week, according to data from the U.S. Energy Information Administration, the lowest since November 2020 and compared to 233.8 million barrels in the same week of 2019, before the pandemic.
Rising employment and mobility drove consumption to an average 8.6 million barrels per day (bpd) in the first half of the year, the EIA said, but it cautioned that it expects demand through 2022 to stay below 2019's average level of 9.3 million bpd as large numbers continue working from home.
Gasoline in Europe's main Amsterdam-Rotterdam-Antwerp (ARA) storage hub fell for a fifth consecutive week last week, mainly due to strong exports to the United States and Africa, while weekly averages of light distillates at Fujairah, the main Middle-East hub, have been well below pre-pandemic levels in recent weeks.
As MRC informed earlier, crude oil stockpiles fell modestly last week, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.
We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC