Deltec Think About This Oil Is Not Gushing - Page 3
Think About This
This year , as successful vaccination programs have been rolled out and as frozen economies have been restarted , consumers have emerged , blinking into the light after lock down . This recovery has been rapid . Excluding air-travel , demand has already returned to near 2019 levels . US demand for gasoline and distillates is within 2 % of 2019 levels . Despite several ongoing refinery closures , for the week of October 22nd the 4-week rolling average of gross inputs into US refineries was 15.7 million barrels per day , just 2 % lower than the same week in 2019 . Although jet fuel demand is still 19 % lower than 2019 levels , we are expecting this to pick up again soon as transatlantic travel is back on .
European oil demand benefits from the same conditions . In addition , record high gas prices are incentivizing a switch to crude oil in the power generation sector . This is estimated to contribute an additional 500,000-600,000 barrels per day to demand , adding 5 % to European consumption .
Emerging market demand is also positive , but lock downs and restrictions due to COVID variants have made the recovery bumpy . In China , oil demand grew to 13.1 million barrels per day as of August 2021 ( only + 2.1 % YoY despite the easy comps ); the Chinese government has shown extremely low tolerance for COVID outbreaks . Elsewhere in Asia supply chain disruptions caused by both COVID and other factors are hurting industrial production and energy demand . Brazilian economic activity has been robust and we expect this to continue as 70 % of the adult population will vaccinated by the end of 2021 .
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