Surging U.S. fuel demand amid stagnant domestic crude oil production is drawing down American crude inventories at the quickest pace in nearly 40 years.
The record-fast decline in U.S. oil stockpiles has started to reflect in the crude oil futures market, where the American benchmark, WTI Crude, has surged by 50 percent so far this year. The U.S. oil price has also started to narrow the discount at which it trades relative to the international benchmark, Brent Crude.
Re-openings in many U.S. states and the start of the summer driving season have sent gasoline consumption in recent weeks to the highest since the pandemic started. Domestic airline travel is also bouncing back, though passenger throughput at airports is still at some 80 percent of pre-pandemic days. The higher fuel demand in the United States is tightening the market, and these bullish factors for oil consumption have started to become evident in the U.S. oil futures market.