(S&P Global Platts) While new cases of coronavirus remain very high globally, economic recovery appears on track and impairment in the energy space has lessened. Even so, product cracks are low, indicative of weak demand, both seasonally and year on year. Power demands have held up well, almost across the board, and have certainly risen markedly from spring.
S&P Global Platts Analytics says the economic recovery remains on track, but risks remain due to a very high rate of increase in coronavirus cases. There has been a significant upswing in cases within Europe, while cases in India continue rising at the highest rate globally. Renewed lockdown measures have been re-instituted in Israel (3 weeks) and in Jakarta, Indonesia (two weeks).
Aviation continues to recover but is far from normalized except for domestic flights in China. Recovery is led by non-commercial and private aviation.
Middle distillate cracks, both gasoil and kerojet have risen most recently after a period of falls but remain statistically low. Key crude oil spreads have also weakened and remain low compared with five-year norms.
US gasoline demand has stalled and is consistent with a flattening in the Apple Mobility trends. PADDs 4 (Rockies) and 2 (Mid-continent/farm belt) continue to outperform, while PADDs 5 (CA, AZ, NV, WA, OR, HI, AK) and 3 (Texas, LA, NM, AL, MS, AR) are underperforming. PADD 1 (East Coast, Florida-to-Maine), is very close to the US composite.
Japanese and South Korean power demand has recently risen from a year earlier, but this could be related to warmer-than-normal weather and a lower year-ago base. Brazilian power demand is modestly higher on the year. Indian power demand remains lower on the year, but the degree of impairment has lessened despite very high increases in coronavirus cases.
US power demand indicates largely seasonal falls associated with autumn weather. Adjusting for the outages (due to storms and fires), power demand is very close to the non-coronavirus-modelled loads, which continues the trend over the last month.
EU power demand is down only marginally on the year. Italy is showing the least impairment, down only about 2%, France and Germany are down about 4%, while the UK is down about 9%.
