Oil demand markers in most of the world's biggest oil consuming countries outside Europe continued to hit post-pandemic highs in the week to Dec. 12, despite ongoing concerns over the impact of the omicron variant of COVID-19 on global growth.
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Mobility indicators in major Asia and Americas oil-consuming countries improved to within just 2% of pre-COVID-19 levels in the week, according to adjusted data from Google, the highest since the pandemic devastated global oil demand in early 2020.
In the US, the world's biggest oil consumer, mobility dipped slightly while activity rose in Brazil, India and Mexico over the week, according to the data which tracks mobile phone activity is a proxy for oil demand.
In Europe, where national holidays in Spain and Italy dragged down average activity, mobility remained more than 15% below pre-pandemic levels, down from 12.6% a week earlier.
Overall mobility in countries representing about half of global oil demand averaged 6.5% below pre-COVID-19 levels in the week to Dec. 5, according to the data.
The highly-transmissible omicron variant, first detected in South Africa in late November, has been found in at least 77 countries and is spreading faster than any previous variant, according to the World Health Organization.
A number of countries have tightened restrictions on travel and mobility to curb its spread awaiting key data on hospitalizations, severe disease and deaths from the variant.
As markets continue to second guess the potential demand impact from tighter COVID-19 restrictions, other data sources also point to the resistance of the global demand recovery.
US crude oil inventories saw their largest draw since September in the week ended Dec. 10, while US gasoline demand increased to 9.5 million b/d, exceeding its pre-pandemic level from December 2019. US demand for distillates surged by more than 1.3 million b/d week-on-week to 4.9 million b/d.
China's refining crude throughputs in November rose 5.5% to a five-month high of 14.57 million b/d, National Bureau of Statistics data released Dec. 15 showed, as refineries strived to increase domestic oil product supplies. But mainland China reported its first case of the omicron variant on Dec. 14 and risks remain that the world's second-biggest oil consumer will impose tougher mobility restrictions in a bid to halt the spread of the virus.
"Into 2022, we expect new COVID variants like delta and omicron may continue to emerge, as well as localized coronavirus outbreaks, but not of the magnitude seen in January 2021, May 2021, or even the August 2021 spikes," Platts Analytics said in a note. "Total demand is expected to extend its recovery, though the pace of improvement will lessen."
Jet fuel demand
Global weekly scheduled airline capacity grew 3.8% on the week to 81.4 million seats for the week starting Dec. 13, amid increases in all regions except for Northeast Asia, according to aviation data company OAG.
Market sources said that jet fuel demand continues to be stable in the face of the threat of increased travel restrictions due to the omicron COVID-19 variant's spread. Demand has largely plateaued since September, with little variation.
Platts Analytics sees gasoline and gasoil/diesel demand returning to December 2019 levels by the end of 2022 while jet demand will remain at 8% lower due to lower airline travel.
For 2022, Platts Analytics projects global oil demand to grow by 4.7 million b/d and reach 103.2 million b/d, which on an annual average basis will be 700,000 b/d above pre-pandemic levels.