A peek at travel patterns in the world’s largest oil-consuming country over the past few days indicates some of the heaviest driving and flying since Covid-19 decimated consumption last spring. That’s good news for Saudi Arabia and its OPEC+ allies as they gradually bring back output, counting on a rapidly tightening crude market.
A return of the world’s No. 1 economy to normalcy is crucial to cement the recovery that has seen oil prices in New York jump to the highest since 2018, little more than a year after they went negative during the virus-driven crash.
U.S. gasoline demand reached the highest since the start of the pandemic in the week leading up to the long weekend, Descartes Labs said Tuesday, citing a survey of mobile device movements. Meanwhile, American airports from Los Angeles to Houston and Atlanta reached passenger levels not seen since early March 2020.
The number of passengers going through airport checkpoints nationwide on Friday neared 2 million for the first since the weeks before flights were grounded by the hundreds last year, according to Transportation Security Administration data released Tuesday.
In California, the Los Angeles International Airport and San Francisco International Airport reached pandemic highs of 78,877 and 35,002 daily passengers on Friday, respectively.
In Houston, the George Bush International Airport on Friday had its largest number of flight arrivals and departures since the start of the pandemic, spokesman Augusto Bernal said. Seattle-Tacoma International Airport expects that once data is in, its passenger count at more than 40,000 people per day will exceed its pandemic high, spokesman Perry Cooper said.
Meanwhile, traders are signaling their bullish outlook in key price spreads that are widening out to their strongest levels in years. West Texas Intermediate’s December 2021 contract touched its highest premium to December 2022 futures since both started trading. This pattern, known as backwardation, reflects expectations of a tightening supply and demand balance.
During the week ended May 25, hedge funds boosted their net-bullish wagers on WTI crude by 5.2% to the highest in three weeks, according to U.S. Commodity Futures Trading Commission data.
