Rise in Remote Working a Threat to Oil Demand

Rise in Remote Working a Threat to Oil DemandRise in Remote Working a Threat to Oil Demand

Working from home has become the norm, and if the trend continues even after the pandemic abates, it could pose a big risk for oil, analysts are warning.
“The biggest threat to oil demand is the rise of remote working. A decrease in commuting and business air travel is clearly negative for oil demand,” Richard Bernstein, the chief executive officer and chief investment officer of Richard Bernstein Advisors LLC, said, CNBC reported.
Gasoline represents a sizable portion of overall oil demand—within each barrel of refined crude about 45% is used for gasoline —and, according to RBC, about 28% of gasoline demand in the US is from people driving to and from work.
Oil prices are, of course, driven by supply and demand dynamics, so a change on one side of the equation can send prices into a tailspin.
Oil took a hit in April as billions of people around the world were subjected to some form of lockdown measures in an effort to slow the spread of Covid-19. With air and road travel coming to a virtual standstill, oil demand fell off a cliff. 
WTI, the US oil benchmark, plunged below zero and into negative territory for the first time on record since no one wanted to take physical delivery of crude with demand expected to remain depressed.
Now, WTI is on track for its best month ever as economies have started to reopen, and as producers have announced record output cuts. But demand might not ever fully recover.

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