Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Oil Demand in Asia Faces Fresh Challenge as Omicron Cuts Traffic

CommoditiesJan 13, 2022 04:48
Saved. See Saved Items.
This article has already been saved in your Saved Items

(Bloomberg) -- Road traffic has thinned across Asia at the start of the year as the highly contagious omicron variant of the coronavirus sweeps through the region, flashing a bearish signal for oil demand.

Less vehicles have transited through most capital cities so far this month than in December, according to mobility data from Apple Inc (NASDAQ:AAPL)., as authorities renew restrictions to curb the spread of the virus. Omicron recently breached China’s tough Covid defenses, prompting Goldman Sachs Group Inc (NYSE:GS). to reduce its 2022 growth forecast for the nation. Flight cancellations are also mounting in Asia.

While the outlook looks bleak, omicron so far hasn’t had a big impact on the oil market. Headline crude prices have maintained an upward trend, and while profit margins from making gasoline in Asia have softened since mid-December, they’re still more than double compared with a year earlier. 


Omicron’s emergence in China -- the world’s biggest crude importer -- is the biggest concern for the market. That’s led to the lockdown of Anyang, a city of 5 million people, with the nation also battling an outbreak of the delta variant in Xi’an. While Apple doesn’t provide data on China, local provider Baidu Inc (NASDAQ:BIDU). showed that road congestion in Xi’an was 39% lower on Jan. 11 compared with a year earlier. In Beijing, congestion was up 16% over the same period.

In India, restrictions have been reinstated in the capital as infections surge, although the federal government has avoided instituting nationwide curbs. Average driving activity over the first ten days of January was 61 percentage points lower than in December, according to Apple, which counts the number of requests made to Apple Maps for directions to calculate mobility.

Less cars are traversing roads in other regional capitals such as Tokyo, Manila and Kuala Lumpur, according to Apple data. The only outlier was Vietnam’s Ho Chi Minh, which has so far recorded an uptick in traffic.

Omicron has turbocharged the infection rate, leading to curbs on air travel globally. China has blocked some flights from the U.S., while the Philippines and Hong Kong canceled fixtures to stem the spread. Worldwide commercial flights over the seven days ended Jan. 9 were about 17% and 21% below the same periods of 2019 and 2020, respectively, according to FlightRadar24.

The cancellations have led to a reduction in jet fuel demand estimates for Asia from BloombergNEF over the first six months of 2022. While air travel is expected to be weak over the first quarter, emerging data pointing to omicron being less severe presents a strong case for the easing of restrictions and renewed travel in the coming quarters, according to Fitch Solutions.

©2022 Bloomberg L.P.

Oil Demand in Asia Faces Fresh Challenge as Omicron Cuts Traffic

Related Articles

Gold Rises 2% on Week; First Weekly Win in Five
Gold Rises 2% on Week; First Weekly Win in Five By - May 20, 2022

By Barani Krishnan -- Gold prices rose 2% on the week to give longs in the game their first weekly win in five. While they may have secured a break from their gloom...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email