European Lockdowns Weigh on Global Fuel Recovery

Renewed restrictions in Europe and the United States to combat the coronavirus have slowed down the pace of fuel demand recovery, offsetting a rebound in Asian economies where consumption has almost returned to preCOVID levels.

As the second wave of the virus hit many Western countries, governments imposed new lockdowns, closing restaurants and bars and banning gatherings. But the measures were not as strict as during the first wave.

France, the United Kingdom, Spain and Poland were under the strictest lockdowns in Europe, according to the Oxford stringency index that assesses indicators such as school and workplace closures, and travel bans.

As a result, traffic in London, Paris and Madrid sharply fell in November after a peak in October, according to the data provided to Reuters by location technology company TomTom, that covered mobility until Sunday evening.

For now, we expect roughly a drop in European oil demand of around one million barrels per day bpd monthonmonth in November, where approximately 80 of this drop can be attributed to the lockdown impact and the rest to monthly seasonality, said Rystad Energys head of oil markets, Bjornar Tonhaugen.

November road demand is usually lower than October.

The IEA director for energy markets and security, Keisuke Sadamori, told Reuters the renewed lockdowns in Europe appeared set to push the outlook for global oil demand toward the downside, although less severe than in the first round of lockdowns in April….

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