Yahoo Finance Gasoline Demand to Top 2019 Levels This Summer, Rystad Says
(Bloomberg) -- Global gasoline demand will remain robust this summer despite recent signs of weakness in the market, according to Rystad Energy A/S, which expects consumption to top levels seen before the pandemic.
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“I see gasoline markets being balanced-to-strong for the summer,” Mukesh Sahdev, head of Rystad’s oil trading solution team, said in an interview. “It’s likely the recent decline in US mobility is a temporary blip.”
The mainstay fuel — a key driver of oil demand — has seen pockets of softness in recent weeks, with a four-week gauge of US consumption at a 10-year seasonal low, excluding 2020. In Asia, refinery profits from making gasoline have slumped, in part on expectations of more exports from China. Against that backdrop, hedge funds have cut their net bullish Nymex gasoline bets.
Global gasoline demand is on track to reach 26.8 million barrels a day in August, above seasonal levels in the past two years and 2019, according to Rystad estimates.
Sahdev’s broadly optimistic take chimes with other positive assessments of the market. Standard Chartered Plc said earlier this month that the pessimism over US gasoline demand was “unwarranted,” citing the trend for initial weak estimates of US consumption to be revised upward.
Elsewhere, Eugene Lindell, FGE’s head of refined products, said while refinery margins had slumped, weakness was likely to be transitory given strong summer demand was set to boost prices. Separately, commodities veteran Jeff Currie, chief strategy officer for energy pathways at Carlyle Group Inc., has talked up prospects for this year’s US summer driving season.
In the US, about 38.4 million people are expected to take to the roads this Memorial Day weekend, the most in more than two decades, according to the American Automobile Association. The holiday falls on May 27.
Road travel has continued to recover from the pandemic, and election year in the US will further boost travel, according to Rystad’s Sahdev. In addition, supplies in the US and Europe will be also be tighter amid closures of refineries and associate gasoline-producing units, he said.
--With assistance from Sharon Cho.
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