Fuel sales in the United Kingdom surged at the end of last week to their highest level since the first lockdown in March last year, according to government data cited by Bloomberg, suggesting that the reopening that began last month is already resulting in higher oil demand and economic growth.
The UK started to gradually reopen on April 12, opening non-essential retailers, restaurants, and pubs for the first time in months as COVID cases are rapidly falling after more than half of the adult population have now received at least one shot of a vaccine. Restrictions on outdoor and indoor gatherings of people from different households will also be eased from mid-May, while the government is considering allowing vacations abroad to a restricted number of countries as early as this month.
The UK’s reopening and the surge in fuel sales “is a tangible proof that vaccine programs are the way out of the crisis,” Tamas Varga, an analyst at PVM Oil Associates, told Bloomberg.
The UK’s economy is expected to recover strongly to pre-COVID levels over the remainder of this year in the absence of most restrictions on domestic economic activity, the Bank of England said on Thursday.
“People may also become more confident about spending. During lockdown some people have saved money as they been unable to spend as normal. Some of that money might be spent as restrictions are eased,” the central bank said.
“Demand growth is further boosted by a decline in health risks and a fall in uncertainty, as well as announced fiscal and monetary stimulus,” according to the bank.
The signs of increasing oil demand and rebounding economy in the UK gives hopes to oil bulls that despite the COVID crisis in India and Brazil, major developed economies, including the United States, will push the global economy and oil demand higher.
By Tsvetana Paraskova for Oilprice.com
