A swift recovery in fuel consumption by U.S. drivers is petering out, posing new challenges to the oil market, economy and global energy industry. After demand for gasoline surged from mid-April to late June, consumption has stayed relatively flat in the past two months and remains well below its pre-pandemic levels, government data show. The fizzling rebound highlights the lingering effects of coronavirus precautions and travel restrictions. Even as some states advance business reopening plans, rising cases in other parts of the country are fueling caution among consumers. Many companies have delayed plans to reopen offices, while many school districts and colleges around the country are opening with hybrid or remote instruction, taking a bigger bite out of fuel demand.

Estimated monthly difference between global oil supply and global oil demand source: JPMorgan ChaseNotes: Negative numbers mean demand is exceeding supply; projections beyond July 2020 .million barrels a day2021-50510152025Sept. 2020x-2.1 million barrels a day
The trend is a threat to the economy because people tend to spend more money when they are moving around and engaging with businesses. Some analysts think gasoline demand will need to rise for the economic recovery to continue at its current pace, especially with many Americans avoiding public transportation due to coronavirus concerns and seeking to take vacations before summer ends.

The stalled demand rebound is helping keep U.S. crude-oil prices stuck in the low $40s per barrel, even with the Organization of the Petroleum Exporting Countries and companies from Exxon Mobil Corp. to Chevron Corp. curbing supply in response to the industry turmoil. Oil has remained in a narrow trading range for two months following a swift rebound after prices in April briefly dropped below $0 for the first time. As a result, fuel prices also have remained flat recently, a boon for those consumers who are able to take advantage at the pump but a threat to energy companies whose spending cuts and layoffs could add to the pressure on the economy.

“The easy work has been done,” said Noah Barrett, an energy analyst for Janus Henderson Investors. “That last 10% to 15% of lost demand is going to be really hard to get back.” He is cautious about the oil-price recovery because of the questions about demand. U.S. motor gasoline supplied by energy companies, a proxy for demand, stayed at roughly 8.6 million barrels a day for two months through mid-August before jumping to 9.2 million barrels a day during the week ended Aug. 21, according to the Energy Information Administration. That is up from a low in April around 5 million barrels a day but well below the figure of 9.7 million barrels a day from mid-March, before lockdowns took hold in much of the country.

Motor gasoline supplied by U.S. energy companies, weekly