Oil demand markers in at least two key Asian economies have backtracked sharply in February, according to mobility data, slowing the world's seasonal activity recovery even as concerns ease over a major impact from the omicron COVID-19 variant.
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Register NowMobility in Russia, Japan, and South Korea -- the world's fourth, fifth, and eighth biggest oil consumers -- fell in the week to Feb. 6, according to adjusted Google mobility data, as new COIVD-19 infections hit fresh highs due to the fast-spreading omicron variant.
At the same time, the data shows, a recovery in mobility to above pre-pandemic levels in India, Brazil and Mexico this month, pointing to large country-level variations in oil demand recovery as omicron outbreaks continue to ripple across the globe.
In the US, the world's biggest oil consumer, mobility was little changed on the week after winter weather-related disruptions caused some demand impairment.
Overall, mobility in 13 countries representing about half of global oil demand averaged 14.4% below pre-COVID-19 levels in the week, the Google data shows, little change from the week before and but up from a seasonal low of 25% below on Jan. 6. The current global mobility level also compares with 3% below pre-COVID levels during the same week in 2021.
"Mobility data indicates continued improvement across the globe but some noted softness in January, due to post-holiday seasonal decline along with some marginal impacts of a spike in COVID cases," S&P Global Platts Analytics said in a Feb. 4 note.
In China, the world's second-largest oil consumer, which is not covered by the Google data, oil demand is expected to improve on the year during the Lunar New Year period as local travel picks up amid more narrowly targeted COVID-19 restrictions, according to Platts Analytics.
Airline travel improvement
The International Energy Agency on Jan. 19 raised its oil demand outlook for 2022 by 200,000 b/d, noting that the economic impact for the omicron COVID-19 variant is more limited as the variant appears less dangerous.
Although COVID-induced restrictions and consumers' anxiety continue to play a role in a softer-than-normal winter demand slump, Platts Analytics expects global oil demand to climb by 2 million b/d in the second quarter as activity rebounds from the post-holiday period.
On the year, Platts Analytics sees global gasoline and gasoil/diesel demand growing by 1.4 million b/d and 0.7 million b/d in Q1. Despite ongoing anxiety over international travel, global jet and kerosene demand is seen rising by 1.3 million b/d in Q1.
Earlier in the week, aviation data company OAG said global weekly airline seat capacity bounced back 7% in the week starting Feb. 7, led by a 33% increase in China. Global seat capacity is currently at 74.5% of the level of the week that started on Feb. 11, 2019, OAG data shows.
S&P Global Platts Analytics expects oil demand to grow by 4.6 million b/d in 2022 when it will recover to pre-COVID levels to average around 103 million b/d. At that level, total demand will surpass pre-pandemic levels by some 0.6-0.8 million b/d.