New York — As the Memorial Day holiday weekend draws near, the allure of beaches, boardwalks and lakes is likely to be greater than ever for many Americans quarantined by the coronavirus pandemic.
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But exactly how many Americans will take to the road for a holiday that typically sees an increase in drivers' mileage is unclear. As is exactly how far they will travel.
Predicting traffic volumes is so difficult that travel club AAA will not – for the first time in 20 years – issue its usual Memorial Day forecast on to how many people will be traveling over the holiday weekend because it believes the accuracy of the data has been undermined by the pandemic.
"Last year, 43 million Americans traveled for Memorial Day Weekend – the second-highest travel volume on record since AAA began tracking holiday travel volumes in 2000," said Cyndi Zesk, senior vice president, travel, AAA Northeast. "With social distancing guidelines still in practice, this holiday weekend's travel volume is likely to set a record low."
Exactly how low is hard to estimate.
US gasoline demand has been rising from its early April trough toward the pre-pandemic level of 9.45 million b/d of four weeks earlier, but it has been difficult to predict.
After several weeks on the up, the most recent data showed gasoline demand fell 608,000 b/d week on week to 6.79 million b/d in the week that ended May 15, according to the US Energy Information Administration.
S&P Global Platts Analytics' proprietary data model differs from that of the EIA, and Platts Analytics estimates real gasoline demand declined 520,000 b/d last week, which was "the first time in six weeks that demand has shown any retracement."
But mobility data from Apple Apps, a part of Apple Inc., showed a 15% increase in the national rate of travel for the week that ended May 18 compared with the week that ended May 10, contradicting the data showing a fall in demand from both EIA and Platts Analytics.
JOB LOSSES ABOUND
The number and status of unemployment claims could be part of the disconnect to explain the difference between last week's uptick in mobility reported by Apple Apps and INRIX, another travel metric service, and the fall in gasoline demand.
The record number of people filing for unemployment has overwhelmed many states' filing systems and delayed payments to many of the filers, adding to their precarious financial situation.
Over 21.4 million workers have been laid off since February, and with "millions more still confined to their homes to mitigate the spread of COVID-19, slavishly following the travel metrics of either service would bring the level of gasoline demand too close to 'normal' to be plausible, with COVID-19 still a concern," Platts Analytics said.
According to Platts Analytics estimates, US gasoline demand is currently down 30% due to the pandemic, with expectations that total US May gasoline demand will be 400,000 b/d higher than April consumption due to partial reopening.
"Although this would limit demand to roughly 7.0 million b/d of gasoline demand, this coming week includes Memorial Day which would normally give a boost to demand. While some increase in driving is to be expected, it should be muted this year," according to Platts Analytics.
REGIONAL RECOVERY, REOPENINGS
However, the impact of the pandemic on gasoline demand has varied by region, and some US Atlantic Coast states have seen severe lifestyle disruptions from the pandemic.
Since the end of March, New York and New Jersey – the two states with the highest number of cases nationwide – have been particularly strict about limiting activity by implementing some of the nation's most restrictive lockdowns to keep the virus from spreading.
Large crowds are expected at area beaches and recreation spots open for the long holiday weekend, but social distancing rules mean that capacity will be half of what it has been in past years.
But a gradual reopening of services in the area is showing "green shoots," Tom Nimbley, CEO of New Jersey-based refiner PBF Energy, which owns and operates two USAC facilities in Delaware City, Delaware, and Paulsboro, New Jersey, said during the company's quarterly earnings call.
Nimbley estimates that while USAC gasoline demand will be slower to return than in other regions, regional demand destruction is now about 35%, up from the end of March's 45% trough.
Regions not under such stringent lockdowns are seeing gasoline demand recovering more quickly.
"When this all began my initial [gasoline] demand destruction was 43%. It has been improving. Last I looked it was just off 20% and heading north," said a St. Louis, Missouri, oil broker when asked about the impact of the pandemic on the region's gasoline demand.
"We have a huge advantage that our population density is much lower. If all [Kansas City, Missouri,] walked the streets we would still be 50 feet apart," he added.