Patronage on public transport has started to recover but remains about 40 per cent (of pre CV19)
Road usage is at 90% of pre CV-19
So there is clear evidence of substitution from public transport to car (even I've done so).
Oil demand reduction is based on overall reduction. Throw in the substitution that we are seeing, and suddenly there is a case for an increase in demand for oil.
If world starts reopening, but a lot more people start driving instead of catching public transport, oil demand could actually shift upward, and rapidly (especially if it results in a shift in consumer preference).
I think this equilibrium shift could catch the market off guard. Let's hope it occurs, and we could see $80 oil (for a short 3-6 months)!
Not saying it will happen, but don't give up just yet....
I would really like to see that waiver though
SEA Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
