Opinion

On the road again: where will US gasoline demand go this summer?

What our data and analysis is telling us in terms of expectations, risks and price impacts

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Written by Suzanne Danforth, Americas Markets Lead, Downstream Oil and NGLS, and Hillary Stevenson, Director, Oil Markets and Business Development.

US gasoline demand is poised to break above the 9 million b/d mark for the first time since the onset of the Covid-19 pandemic. The vaccination programme nationwide has positioned the US to reach a critical mass of vaccination (70%) by August 2021. That will encourage Americans to get back on the road again as states relax stringency measures. The August date is the basis for our forecast that US gasoline demand hits a monthly average of 9 million b/d as soon as June. And for our base case, we expect the US to have enough refining capacity to meet this expected rebound in gasoline demand.

A faster increase in daily vaccination rates could translate into meeting the critical mass vaccine threshold in July rather than August. This would support a swifter state and local economic reopening and stronger recovery in individual personal mobility than is currently in our base case. That would lift our target 9 million b/d even earlier in the second quarter to May.

The US pace of recovery resembles the path we saw in China during 2020 when its road transport demand returned to 2019 levels in the summer of 2020.

However, a potential downside risk for US gasoline also looms amid the emergence of Covid-19 variants in the US, which could delay economic reopening as well as vaccine reluctance among some Americans.

US gasoline is already on a strong rebound

While the US still has road to travel to meet vaccination critical mass, as of 18 April, 81% of adults over 65+ have received at least one dose, and 50% of adults (18+) have received at least one dose, providing some protection from severe Covid-19 impacts.

Vaccination is linked to increase mobility on a state level and individual level in the US. While each state differs in terms of reopening benchmarks, the easing of restrictions is ultimately linked to vaccine progress.