In the July Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration said it does not expect gasoline consumption to surpass 2019 levels until 2022. But a recent study of 14,000 fuel stations across the U.S. shows that Midwestern fuel sales are now 2% up from 2019 levels.
Fuel consumption in the West and Northeast took a nosedive after both regions began implementing COVID-19 response measures in March 2020. The West Coast states were among the first in the nation to issue stay-at-home orders, and the Northeastern states instituted some of the nation’s longest, strictest and earliest economic closures. By April 2020, fuel sales were down 34% in the West and 45% in the Northeast compared with 2019 levels.
Fast forward to April 2021: the strong COVID-19 vaccine rollout facilitated a steady climb in fuel sales, but consumption was still down 7% in the Northeast and 10% in the West versus the same month in 2019. Those numbers continued to strengthen in May and June, but then fell again in July and August following a surge in cases related to the Delta variant.
Fuel sales in the Midwest and Southeast have fared much better through the pandemic. Both regions saw similar double-digit declines in April 2020 immediately following COVID-related mobility restrictions, but sales there continue to recover much faster than in the West and Northeast.
In the summer months of 2020, fuel sales in the Midwest and Southeast were down roughly than 4.5% from 2019 level, versus roughly 12% in the West and Northeast. Then between September and November, Midwestern and Southeastern fuel sales dropped significantly as their metro areas saw dramatic increases in daily new cases.
Both rebounded by January 2021, only 2% - 4% down from 2019 levels and 2% - 5% up from 2020 levels.
Then in the summer of 2021, with rising sign prices and COVID cases related to the Delta variant, we see a divergence.
Whereas fuel sales in the Southeast remained 5% down from July 2019—much like the rest of the country—fuel sales in the Midwest have fared much better. The Midwest was up 1% in June and July and up 2% in August versus the same months in 2019.
Whatever the reason why the Midwest is ahead in sales, these summer trends bode well for the remainder of the Midwest’s fair-weather months.
There are a number of market forces beyond COVID-19 that explain the fluctuations we’ve seen across these 14,000 sites since January 2020. It’s unclear how COVID-19 variants will impact fuel demand for the remainder of 2021, but oil prices have already fallen in anticipation of decreased fuel consumption and increased supply following China’s loosened import restrictions.
It’s impossible to know whether the Midwest will maintain this gain on 2019 sales given the market factors at play, but the generally positive trends across the board are promising for the rest of 2021.
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