America’s Season for Peak Fuel Demand Starts Off With a Whimper

For all the optimism over a recovery in oil demand and prices, the weekend that heralds the U.S. summer driving season proved to be a damp squib. While beaches were open and states across the country emerged from coronavirus-related lockdowns, demand for gasoline ended up falling over the Memorial Day weekend. That may have been because people kept their driving local, when in previous years they had traveled farther, according to Andy Lipow, president of Lipow Oil Associates LLC in Houston.

The lackluster start to what is typically considered the season for peak American fuel demand shows how vulnerable the oil market remains as the fallout from the coronavirus crisis haunts economies. Crude prices have surged about 80% this month, after a historic collapse below zero in April, on supply cuts by major producers as well as optimism that consumption is recovering as lockdowns ease.

“The public stayed closer to home and consumed less gasoline because they were going to recreational venues nearby rather than traveling long distances around the country,” Lipow said.

Gasoline demand fell 1.34% from Thursday to Monday of the holiday weekend compared to the week prior, Patrick DeHaan, an analyst at GasBuddy, said in a tweet Tuesday. Consumption on Monday fell 0.5% from the week prior. Compared with a year earlier, gasoline use is estimated to have slumped 25% to 35% over the long weekend.

View full article at www.bloomberg.com