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Pre-COVID US oil demand to return next year

According to the US Energy Information Administration (EIA), US oil demand will return to the 2019 average of 20.5 million barrels per day (bpd) by August 2021. The US is the world’s largest consumer of oil and so this is a reasonable indicator of global demand.

US oil demand appeared to bottom out in April when many states imposed lockdown restrictions, but is increasing again according to the EIA:

“In April, consumption of liquid fuels in the United States (as measured by product supplied) reached its all-time monthly low since the early 1980s at an average of 14.7 million barrels per day (bpd). Weekly data show consumption of petroleum products has increased as states have relaxed restrictions.”

A rebound will be gradual according to the EIA’s forecast, so large US oil producers, such as ExxonMobil – the oil major responsible for the Mobil lubricant brand – will need to continue balancing their supply in line with lower demand for the coming 12 months.

The EIA says almost half of the drop in liquid fuels consumption is accounted for by lower motor gasoline consumption, which it expects to be down 10% this year compared to 2019. Based on the assumption of rising employment levels over the coming year, it expects gasoline consumption to increase to just 2% under its 2019 average. The consumption of jet fuel has been harder hit, with it expected to be 31% down this year and rise to 12% lower than 2019 levels in 2021.

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