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Motus Fuel Trends Report Reveals The Impact of COVID-19 on Oil Markets

Motus O logo By Motus October 1, 2020

Categories: Motus News

National Fuel Price Drops 17% Compared to Last Year Due to Reduced Air Travel, Shopping and Commuting Trips  

BOSTON, Mass., September 30, 2020Motus, the definitive leader in solutions for businesses with mobile-enabled workforces, today released its 2020 Fall Fuel Outlook Report. The report identifies how trends related to COVID-19, including reduced air travel, shopping and commuting trips, have impacted fuel prices.

According to the report, the average U.S. consumption of gasoline so far in 2020 has been about 1.2 million barrels per day fewer than 2019. Additionally, the national fuel price has dropped 17%. As a result of shelter in place orders, people drove about 112 billion (40%) fewer miles in April 2020 when compared to April of last year. Although some sectors and areas of the country reopened heading into the summer months, gasoline demand during the summer driving season remained 11% lower this year.

“The 2020 average national fuel price is trending at about 17% less than the 2019 average national price,” said Ken Robinson, Market Research Manager at Motus. “This is a direct result of the impact of COVID, which severely limited the frequency of air travel, diminished shopping trips and drastically reduced – or completely halted – commuting trips.”

Air travel volumes remain low as people continue to avoid large group travel options. Current average air travel volumes are about 70% lower than 2019 and commercial airlines continue to cut back on flights. These volumes have plateaued since July and a return to 2019 levels for business and leisure travel is expected to be slow.

The report also found that for 40% of U.S. motorists, shopping and commuting are primary reasons to own a car. Following closures of stores and shopping malls, ecommerce orders have boomed this year. As such, UPS reported a 22.8% increase in average daily package volume in Q2 2020 – delivering more than 21 million packages per day in the U.S. The current growth in ecommerce indicates that physical shopping trips could decline by as much as 30% on an ongoing basis. Depending on how rapidly physical shopping trips are abandoned, U.S. gasoline consumption could fall by an additional 2.7 to eight billion gallons per year.

As for commuting, mass transit ridership volumes declined rapidly from March to May. Only 60% of transit users expect to go back to using public transit. While this could imply an increase of commuters on the road, it is overshadowed by the size of the new remote workforce. People who don’t expect to return to mass transit make up about 2% of all U.S. workers. To put that in perspective, April of 2020 saw about 62% of U.S. workers working remotely full-time. Depending on how many people abandon their commute, the shift to remote work could eliminate 140 billion vehicle miles traveled on U.S. roads every year. This will cause U.S. gasoline consumption to fall by three to six billion gallons annually.

“While some of these influencers are only short-term, others will affect driving habits for years to come,” added Robinson. “At the very least, we anticipate this downward pressure on gasoline prices to persist into Q2 of 2021.”

To access the full report, please visit: https://resources.motus.com/reports/motus-2020-fall-fuel-outlook


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