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New mobility restrictions are challenging the outlook for oil demand. Traffic and flight data are showing a clear deceleration, which is likely to continue through winter. The prospects of weaker demand for oil products and thinner margins are keeping the offtake from refiners low, per ANZ Bank.

Key quotes

“Surging COVID-19 case numbers are hindering the recovery of road and aviation transport, with developed markets seeing notable declines in traffic levels. Fresh mobility restrictions in Europe and some US states leave little hope of short-term improvement.  

“Weaker refinery margins are not helping, as offtake from oil refiners remains subdued. Softening gasoline demand should restrain any pick-up in refiners’ demand.” 

“There are early signs of supply coming back. US oil and gas rig counts are increasing, and Libya is restoring production. OPEC+ meets on 30 November. Should demand keep weakening, we believe the group will delay the production quota increase until 2021.”