WASHINGTON (DTN) -- Edging higher from Tuesday's nearly three-month lows, nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced modestly in early trade Wednesday despite growing skepticism that a modest demand recovery would continue this month and into the fourth quarter as global economic growth remains far below the pre-pandemic level amid stalled progress at controlling the coronavirus.
Nearly six months after the coronavirus pandemic shuttered global air travel, closed nonessential businesses and left millions of people out of work, major economies still struggle to regain their pre-pandemic strength.
In the United States, measures of mobility show a much-needed boost for fuel demand over the holiday Labor Day weekend when many Americans took to the road for a final summer vacation, but the near-term trend still points to a stalling recovery. In the week-ended Sept. 6, vehicle traffic in the United States jumped above February levels for the first time since the pandemic, but quickly dropped back from those highs following Labor Day. U.S. gasoline demand is tracking about 8% to 10% below year ago, with the year-on-year gap seen widening.
U.S. Transportation Security Administration reported air travelers in the United States during the holiday weekend at 935,308 reached their highest point since mid-March when restrictions came into effect but remain nearly a third of what it was a year ago. Data from OpenTable, a restaurant booking platform, showed reservations improved for the sixth straight week through Sept. 6 but are 42% below year ago.
A bright spot for the post-lockdown economy is the housing market as record-low mortgage rates and social unrest in major cities has sparked a demand push for home buying. Mortgage applications jumped 2.9% for the week ended Sept. 4, according to The Mortgage Bankers Association.
Still, demand uncertainty has been reinforced by flare-ups in coronavirus outbreaks that could overwhelm a nascent recovery in fuel demand.
In early trading, West Texas Intermediate for October delivery gained 41 cents to $37.18 per barrel (bbl) after shedding over 8% in value prior session. U.S. crude benchmark closed Tuesday trade at $36.76 bbl, the lowest trade on the spot continuous chart since the middle of June. The international crude benchmark Brent November contract edged 20 cents higher to trade at the psychological $40 bbl watermark. NYMEX ULSD October added 0.72 cents to $1.0845 gallon and front-month RBOB contract gained 99 cents to trade near $1.1127 gallon.
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