The economic recovery from the pandemic is on track, many expect that travel demand will be higher as the vaccine is steadily rolling out. “There is plenty of pent-up oil demand ready to be unleashed,” said Francisco Blanch, the BoA’s New York-based head of commodities research. Brent futures traded near $74 a barrel on Monday. In the meantime, the ever-increasing bullish outlook for oil is adding pressure on OPEC, who will have a meeting next week to consider increasing its production since the pandemic cut.
As for how remote working affects oil demand, surprisingly, not by much. Many home workers still use cars during the day to run personal errands. The travel side, however, will be a different story. The airline industry accounts for a significant portion of oil demand. As the pandemic recovery goes smoothly, the potential oil demand for traveling will skyrocket. Expectations for a tight market in 2022 is far from unrealistic.
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