Although problems with the European vaccine program and slowing crude oil purchases caused futures prices to fall more than 7% last Thursday, data from around the world showed that demand was recovering steadily, albeit intermittently.
A year ago, billions of people were trapped at home because of the epidemic, and idle jetliners were parked on the taxiway of the airport. Today, airports in the United States are showing the busiest scene since the outbreak began, and flight attendants are returning from their holidays.
The flight attendant industry is one of the hardest hit industries by the epidemic, and these steps towards normality are just one of many signs that the world is beginning to move again. Gasoline, diesel and aviation fuel consumption reached the highest level in more than a year.
Market jitters may still be reasonable. The new round of blockade in Italy shows that if the epidemic accelerates again, any progress may soon return to the origin. However, the situation is likely to continue to improve throughout the summer, traditionally the peak of oil demand.
More than 410 million doses have been vaccinated in 132 countries. The president of the United States has just signed a $1.9 trillion economic rescue plan into law, prompting analysts to greatly raise their expectations of economic growth.
Norbert Ruecker, head of economics and next generation research at Baosheng Group, said: “due to economic recovery, stimulus measures, progress in vaccination and slowing epidemic measures, oil demand in the western world seems to rebound. It’s hard for Europe’s vaccination problem to change the economic outlook. ”
According to the International Energy Agency (IEA), in March and April last year, during the most severe epidemic period, global oil demand dropped by 30%, and now it has returned to about 95% of the highest level (slightly higher than 100 million barrels / day) before the epidemic in 2019. Combined with the sharp production cuts by OPEC and OPEC +, oil prices have rebounded more than 20% this year, even after a sharp fall on Thursday.
According to flighttradar24, commercial flights have returned to two-thirds of their pre epidemic levels, the most active since the sharp drop in air traffic a year ago. In the United States, the passenger flow of airports has increased. As of Thursday, the daily passenger flow has exceeded 1 million for eight consecutive days, which has never happened since the outbreak began.
Shipping data showed that from February to March, the flow of gasoline and diesel oil from refineries along the Gulf coast of the United States to Mexican ports accelerated, indicating once again that people are optimistic about travel, as resorts in Latin America are preparing to attract a large number of tourists during the spring vacation.
Sri paravaikkarasu, head of FGE Asia oil, said aviation fuel demand in Asia should gradually improve in 2021, mainly driven by domestic flights.
But there is still a long way to go for the full recovery of the market. Air traffic in Europe has been higher than expected, but it is still hovering at about a third of the level before the outbreak.
Paravaikkarasu said: “it will take months for the border to be fully open, even if the vaccine is given rapidly and massively. In view of the cautious way to resume international flights, aviation oil demand in Asia should only return to the pre epidemic level by 2023. “