According to the American Automobile Association's estimate, the number of people traveling during the Independence Day holiday in the USA is expected to reach a historical high of 71 million, which is expected to boost fuel demand and tighten the oil market.
It is estimated that nearly 71 million Americans will travel during the Independence Day holiday next month, setting a new historical high, which brings hope to the oil bulls who hope for a rise in demand during the summer driving season. In terms of product structure, the operating income of 10-30 billion yuan products is 401/1288/60 million yuan respectively, and the overall sales volume of the company is 18,000 kiloliters with a YoY growth of 28.10%.
According to the American Automobile Association (AAA), from June 29 to July 7, it is expected that about 60.6 million Americans will drive 50 miles (80 kilometers) or more, a 4.8% increase from the same period last year. During this period, it is estimated that about 5.74 million people will travel by plane, a YoY increase of 6.9%. Another 4.62 million people are expected to travel by other means.
For crude oil traders, the expected tourism boom will be a reassuring signal. They have been betting that the US oil market will tighten this summer driven by the increase in fuel demand. The growth of US oil consumption will also help offset concerns about weak oil consumption in other regions.
Although wage growth has lost momentum and consumers have saved less during the pandemic, the US tourism industry still maintains strong growth. According to AAA, short-term travel, which was once seen as retaliatory consumption, has become normal. Another encouraging factor is that gasoline retail prices are lower than seasonal levels in the past two years.
AAA spokesperson Aixa Diaz said, "People may be willing to reduce spending on goods, but they will not reduce spending on experiences."
The rebound in aviation has always been a bright spot in fuel demand, and one indicator that measures aviation fuel consumption is at its highest level since 2019. JPMorgan analysts cited data from the US Transportation Security Administration that during the Memorial Day holiday in May, the number of passengers flying increased by about 6% compared with 2023.
During the Memorial Day holiday in May, the number of passengers traveling by air increased by about 6% YoY.
In contrast, gasoline demand is expected to weaken, because even if Americans increase their travel mileage, the improvement in vehicle efficiency will also limit consumption growth. According to RBC Capital Markets' data, gas station retail sales in May holidays were flat YoY.
Patrick De Haan, head of petroleum analysis at GasBuddy, said that gasoline demand looks lukewarm so far this summer, with peak consumption down about 10% from last year.
"We usually see peak gasoline demand at some point in late July, so there is still some room for it to increase. But it looks like our gasoline demand is indeed slightly lower than last year," he said.