Thanksgiving travel week in U.S. shows lowest gasoline consumption since 1997
Demand for motor fuel plunged 19.3% compared to 2019 and may remain subpar well into 1Q 2021
U.S. motorists stayed off the road during the Thanksgiving holiday in overwhelming numbers as the coronavirus surged across the country, according to the latest weekly survey of retail fuel stations by OPIS, an IHS Markit company.
Gasoline sales fell a staggering 8.4% (nearly 185 million less gallons) from the previous week for the seven-day period ending November 28, bringing consumption to the lowest level for a Thanksgiving Week in 23 years, going back to 1997.
"As we come out of Thanksgiving and look ahead to Christmas and the New Year, gasoline sales show that additional waves of the coronavirus are very much impacting travel decisions," said Tom Kloza, executive director, IHS Markit and a veteran analyst of North American fuel trends. "We're heading toward a 90-day period where gasoline demand gets further crimped by winter weather and post-holiday cocooning. By January, we may regularly see demand numbers not witnessed since the last century."
"This unprecedented drop in gasoline demand registers caution that has gripped the nation and led many people to avoid the traditional large family Thanksgiving dinner as the virus wave smashes across the country," said Daniel Yergin, vice chairman, IHS Markit and author of The New Map. "We likely won't see a turnaround until the wave breaks and the new vaccines are deployed."
The OPIS survey tracks actual gallons moved out of retail stations and it features sharper losses than those reported by the Energy Information Administration (EIA). EIA measures movement of gasoline from primary stocks, while the OPIS survey tracks actual weekly sales at nearly 25,000 stations.
Year-on-year comparisons are even more dramatic at the regional level, with some regions seeing declines of 20% or more from Thanksgiving Week 2019.
Data within the OPIS report shows considerable variation across the country.
- Northeastern gasoline sales dropped 10.1% during the week with the year-on-year loss at a gaping 25.9%.
- The Rockies saw the smallest slide (5.6%) but that is substantial enough to dramatically impact supply and demand balances as winter approaches.
- California was measured with a year-on-year loss of 17.3%, but that gap is likely to grow thanks to tough new stay-at-home restrictions. For decades, the Golden State led all U.S. states in consumption of gasoline, but that torch has been passed to Texas, which finds smaller year-on-year volume declines of 15.8%.
- New Jersey is the hardest hit state, with gasoline volumes plunging by nearly 30% from 2019.
- The Midwest was off 23.3% versus last year, led by Illinois which saw a year-on-year deficit of 26%.
- Only two states—Wyoming and Utah—are outliers with gasoline consumption rising year-on-year by 0.2% and 1.1%, respectively.
The data speaks to a major problem for the petroleum industry and oil prices as it recovers from unprecedented demand declines for most of 2020.
"A persistent rebound in global oil markets requires profitability in transportation products," said Fred Rozell, president, OPIS by IHS Markit. "But that won't happen until demand recovers."