Europe's road traffic recovery starts to slip as second-wave fears mount

London — Road traffic levels in most of Europe 's biggest economies are easing back from post-lockdown highs amid rising concerns that measures to contain a second wave of coronavirus infections will throw the region's fuel demand recovery into reverse.

Average traffic congestion slipped to 12% below a year-ago levels last week in Berlin after having fully recovered from early April lows, according to TomTom data.

The slowdown in the traffic levels—a proxy for gasoline and diesel demand—has continued this week, with Berlin's congestion at 22% below a year earlier on July 16, the lowest for a Thursday since late May.

Germany , Europe 's biggest economy and fuel market, began easing its lockdown restrictions earlier than most European countries in mid-April. The move allowed the country's driving activity to rebound from a low on March 21.

Although most European countries have significantly eased lockdown measures since April, they remain sensitive to new outbreaks, with some partial and localized lockdowns already implemented.

In Germany , for example, new rules this week allow for travel curbs in and out of coronavirus hotspots to limit the spread of the virus. Spain has reimposed lockdowns in the Galicia and Catalonia regions due to outbreaks, and French health minister Olivier Veran this week said there were signs of a resurgence of coronavirus cases in the Paris region.

A similar trend in sliding driving activity is now visible in Spain , France , and Italy , TomTom data shows.

In Madrid, traffic congestion fell to 61% of year-ago levels on July 16 from 57% a week earlier. Traffic in Paris was 21% below a year earlier compared with 12% the week before.

In the UK , Europe 's second-biggest fuel market where the recovery in road fuel sales has lagged its regional peers, congestion levels were little changed week on week in the four days to July 16.

Demand 'chokehold'

Global oil prices have wobbled in recent days as a surge of coronavirus cases in the US and other key markets, such as India , fuel concerns that the recovery path for gasoline , diesel and jet fuel could take longer than expected.

"Oil demand appears to be in a soft chokehold as the US is ensnared in what appears to be a second wave of the COVID-19 epidemic," Rystad Energy oil analyst Louise Dickson said in a note.

"Western Europe and Australia have also seen slight declines in road traffic levels, whereas most parts of Asia are still seeing a rebound in road traffic. Less transport of people and cargo on the roads translates into mounting pressure for gasoline demand specifically."

Although European driving activity has rebounded from lockdown lows of April, many believe road fuel demand may yet to have reached seasonal levels a year earlier.

Mobility data from sources such as Apple based on routing requests only compares recent data to pre-lockdowns levels, a measure that does not take into account the seasonal activity rise during the warmer or longer summer days in the northern hemisphere.

Last week the International Energy Agency estimated that while mobility had mostly returned to pre-crisis levels in France and Italy , gasoline demand in the countries was still down more than 20% from normal levels.

The IEA estimates European oil demand collapsed by 3.2 million b/d, or 23%, year on year in the second quarter and will average 1.44 million b/d lower over the year. By Q4, however, most fuels would have recovered to above 2019 levels except for jet fuel , the IEA said.

S&P Global Platts Analytics forecasts European oil demand will shrink by 1.6 million b/d on average in 2020.