India’s Fuel Sales Rebound From Virus Hit in Boost for Oil Bulls

(Bloomberg) -- India’s gasoline and diesel sales rebounded in the first half of June, offering early evidence the nation’s energy consumption is on the mend after a deadly second coronavirus outbreak that hammered demand.

Sales of the nation’s two most-used road fuels rose as much as 13% from the same period last month, according to people familiar with initial data from the three biggest retailers. That’s the first monthly increase since March.

Global energy demand is fast recovering from the devastation wrought by the pandemic, and the positive signal from India will help to support the bullish narrative. Brent crude, the global benchmark, has rallied back above $70 a barrel, and leading traders including Trafigura Group and Glencore Plc say that more gains are in store. India is a leading oil importer, taking the bulk of its cargoes from producers in the Middle East, including Saudi Arabia and Iraq.

The South Asian nation is emerging from the Covid-19 wave that overwhelmed healthcare infrastructure and triggered localized lockdowns, leading to a slump in fuel consumption and cuts in processing by refiners. Now, daily cases have sunk back below 70,000 from more than 400,000 at the outbreak’s peak, and curbs are being eased. Indian Oil Secretary Tarun Kapoor told Bloomberg TV on June 11 that he expected the demand recovery to accelerate.

Still, the rebound has some way to go. Sales of diesel and gasoline -- which account for more than half of nationwide oil consumption -- remain lower than last year’s level, and are about a fifth less than pre-virus totals in 2019.

Spokespeople for Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., declined to comment. The three retailers account for more than 90% of the nation’s fuel sales.

Here’s a table of the preliminary data:

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