Europe’s Oil Demand Gets a Boost as Drivers Hit the Roads Again
(Bloomberg) -- In parts of Europe, highways are getting as busy as they were before the pandemic, offering a boost to the region’s oil demand.
Traffic on Spain’s toll roads was the closest to 2019 levels in at least 15 months last week, according to data from operator Atlantia. It’s a similar picture in France where highway use in the early weeks of May is only marginally down on 2019 levels. In Poland, agency figures show traffic levels are now higher than two years ago.
It’s all part of a wider picture of sharply recovering road use in countries where vaccination rates are picking up and restrictions on movement are easing. The European Union is second only to mainland China in the number of vaccine doses it’s administering per day, according to Bloomberg’s vaccine tracker.
“What is underpinning the oil demand growth in Europe is the rapid rate at which the Covid-19 vaccinations have been deployed,” said Kevin Solomon, analyst at brokerage StoneX Group. “Restrictions in the European economies are beginning to be gradually phased out as we head toward the summer months.”
The boost is feeding all the way through to demand for crude oil with buying of crude from the North Sea and Mediterranean strengthening, according to traders of the region’s barrels.
While the data offer reason to be optimistic about a wider oil market recovery, overall European demand remains down on normal levels as other sectors, notably jet fuel, continue to struggle.
Europe’s recovery is also lagging other parts of the West. Late last month U.K. road fuel sales posted their strongest figures since the pandemic began, while U.S. gasoline demand was the strongest since March 2020 last week.
However in both of those countries, the pace of the recovery in demand has subsequently slowed once the initial impact from re-opening started to fade.
It’s not just Europe’s highways that are getting busier, however, traffic in cities is picking up too. A sample of 15 European capitals had the highest levels of congestion this year last week, according to data from location technology company TomTom NV.
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