Why I Hope Oil Market Bulls Are Right About Summer

Why I Hope Oil Market Bulls Are Right About Summer

Could this be the moment when the oil market sustainably turns the corner? There are many reasons for hope.

The US, the UK and parts of Europe are opening back up, buoying hopes for a bumper summer for holidays and maybe even overseas travel. New York City is reopening and it plans a big ad campaign to attract visitors, both domestic and foreign. Londoners are getting out and about again, with hopes that sporting and cultural events will soon resume in front of live audiences.

That all means a big boost for oil demand — as long as things pan out that way.

People are taking to their cars in droves as restrictions ease, using them in favor of public transport to reduce the risk of infection. U.S. drivers are using more gasoline than at any time since the virus hit and demand is within 5% of the pre-pandemic five-year average for this time of year. Profits from making the fuel are near seasonal five-year highs and are expected to stay strong as the Northern Hemisphere heads into its summer driving season.

This is undoubtedly good news, and has helped to push oil forecasts to new highs: Citigroup Inc. is suggesting demand could reach