From bustling U.S. airports to surging demand for gasoline, all signs from this past Memorial Day weekend reaffirm the oil market’s bet that Americans will be out traveling in force this summer.
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.
“The cautious optimism has turned to fully optimistic,” said Michael Tran, an analyst at RBC Capital Markets. “We were in the stage where we all thought this was going to be a barn-burner of a summer for mobility, and now that we’ve crossed past Memorial Day and into the summer,” some of the confirmation is “coming through from the real-time data.”