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Oil demand markers in most major European economies continued to fall in the week to Nov. 15, as governments react to rising COVID-19 cases in most countries while supply chain disruptions continue to drag on activity.

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Mobility in Europe's top five economies in the week to Nov. 15 averaged 13.7% below pre-COVID levels, according to the latest Google data, down slightly on the week and well below a high of 7.2% below pre-COVID levels in mid-September.

France saw the biggest fall week on week while the UK was the only country to show an increase, the data shows. UK mobility is hovering around post-pandemic highs of 19% under pre-COVID levels and its road fuel sales remain stable at around 90% of pre-COVID levels, according to the latest official weekly data.

The World Health Organization on Nov. 16 said that coronavirus deaths in Europe rose 5% in the previous week, making it the only region in the world where COVID-19 deaths had increased.

Germany introduced tighter COVID-19 restrictions on unvaccinated citizens from Nov. 18 after new cases hit record highs, and cases have surged in Belgium and the Netherlands. Austria is to impose a general lockdown from Nov 22. and Italy has tightened its green pass mobility rules.

GDP growth forecast in major European economies over the next three quarters has slowed over the last month, sliding to a six-month low in October.

"This reflects the challenges created by higher energy costs and the impact of supply chain disruptions," the International Energy Agency said in its latest monthly oil market report on Nov. 16. "These factors will limit the potential for European demand to approach 2019 levels next year. The threat of renewed restrictions on activity, because of recent rises in COVID-19 cases in several European countries, could put a further drag on growth."

Product cracks fall

With reduced mobility hitting fuel sales in the region, road fuel stocks have risen and fuel product cracks have suffered large falls in recent days.

Gasoline inventories in the Amsterdam-Rotterdam-Antwerp trading hub rose 3% to 869,000 mt in the week to Nov. 18, the first build in three weeks, while naphtha stocks jumped 36.3% to 263,000 mt, according to Insights Global data.

The Eurobob gasoline benchmark saw its crack spread to Dated Brent slump to $7.29/b on Nov. 18 from an average of $12.49/b in October. Ultra-low sulfur diesel's premium to Dated Brent dropped to $10.08/b from $12.21/b in October while the jet crack to Brent in Rotterdam is down to $7.62/b from $11.46/b last month.

Meanwhile, Kpler shipping data shows that gas exports from Northwest Europe to the US Atlantic Coast are also set to fall to a 15-month weekly low in the week started Nov. 15.

Global recovery

Despite the impact on activity to rising infections rates in Europe, mobility in other regions remains robust or is improving. Excluding the impact of national holidays in Brazil and Mexico during the week to Nov. 15, the four top Americas and Asia region economies, excluding China, saw mobility average around 6% and 3% below pre-COVID levels respectively, the Google data shows.

"Global mobility is generally improving, though there is seasonal softness being seen in Europe," S&P Global Platts Analytics said in a Nov. 18 note. "Compared to the seasonal decline seen last year, European mobility is actually holding up relatively well... We still expect individual country outbreaks into 2022, though peaks should generally subside which will lead to a pattern of asynchronous waves of generally declining severity."

Global weekly scheduled airline capacity increased by 0.9% on the week starting Nov. 15 to 28.4% below the equivalent period in 2019, aviation data company OAG said, but the data shows a weakness in China and Europe on the week.

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 reduced air 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.