Record-Breaking Increase in Oil Demand Expected to Offset 2020 Oversupply
BOSTON, Mass., May 25, 2021 – Motus, the definitive leader in anywhere workforce solutions, today released its 2021 Summer Fuel Outlook Report. The report highlights key data related to fuel price fluctuations and explores the impact these changes will have on the summer driving season. It also reveals that a sharp increase in travel is anticipated to send sustained fuel demand back to pre-pandemic levels over the next six months. As a result, Motus projects 2021 fuel consumption will peak in August, soaring past Q3 of 2019’s average.
The report provides additional insight into fuel supply and demand trends, and how extenuating circumstances continue to disrupt conventional price cycles. For example, March of 2021 marked the first time this year that gasoline sales have surpassed 2020 levels. Both driving activity and gasoline levels have been steadily increasing over recent months. Despite this, oil suppliers have maintained reduced production levels to correct the supply and demand imbalance caused by pandemic-related nationwide stay-at-home orders. If consumption increases continue as expected, the world will reach a production and consumption balance in Q3 of this year.
“Increased driving activity is eliminating the supply glut from 2020, so we expect fuel to return to pre-pandemic levels soon,” said Ken Robinson, market research manager for Motus. “With growth in vehicle miles traveled, passenger vehicles are progressing towards the 90% recovery range thus far in 2021. As vaccinations increase and pandemic restrictions relax, the demand for fuel will drive sustained prices beyond levels we saw in 2019.”
Demand at the gas pumps also drives refinery activity in the United States. Yet crude oil refining has been volatile this year, despite driving activity showing sustained signs of recovery. Disruptions such as the Colonial Pipeline ransomware attack have caused supply chain and inventory obstacles and shut down refineries for weeks at a time. As refineries begin to scale up production for the surge in summer travel, activity is starting to align with the 2019 trend – just at lower output levels.
Additional findings in the 2021 Summer Fuel Outlook Report include:
- 2021 gasoline sales are trending 9% lower than 2019 levels.
- Heavy truck vehicle miles traveled (VMT) is outpacing passenger vehicles by a wide margin. While passenger cars have progressed to the 90% recovery range thus far in 2021, trucks are logging approximately 120% of their pre-pandemic VMT.
- Global oil production is on pace to average 97 million barrels per day in 2021, up from 94 million barrels per day in 2020. If this rate continues into 2022, global oil production is forecast to produce an average of 102 million barrels per day, eclipsing 2019’s average of 101 million barrels per day.
- Crude oil prices are the main influencer of prices at the pump. Every dollar increase in crude oil prices drives about 2.4 cents increase in gas prices.
- Fuel can make up as much as 23% of driving costs.
To access the full report, please visit: https://resources.motus.com/reports/2021-summer-fuel-outlook-report