California Gasoline Demand Falling with Next Lockdown
(Bloomberg) -- Gasoline demand in America’s biggest fuel market is headed toward a decline with California imposing a new round of business closures to fight a spike in coronavirus cases.
Prices for San Francisco gasoline by pipeline slipped for a second day on Tuesday after California Governor Gavin Newsom scaled back reopening measures, banning indoor restaurant dining and ordering a halt to some indoor activities in the most affected counties.
“This is going to have an impact on U.S. demand and, in a roundabout way, supply too,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “A good way to put it is that California will be a bellwether for the rest of the country.”
Before the pandemic, drivers in California were consuming about 4.2 million gallons a day of gasoline. That number halved during the crisis, according to the latest Energy Information Administration data from April.
California is generally isolated from other U.S. oil markets with no dedicated inbound pipeline connections. Yet the impact of an expected decline in fuel demand there is likely to loom large.
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