Scientists have repeatedly warned that colder temperatures in fall and winter could lead to a surge in COVID cases. Initial evidence supports that theory: cases are rising in the United States (especially in many northern states), Canada, and Russia. If COVID cases surge in the winter as predicted, domestic and international oil and gas demand will suffer.

A return to record lows for crude and crude products demand seen in March and April appears highly unlikely, however. Governments, businesses, and consumers have a much better understanding of the virus and are much better equipped to manage risks than they were earlier this year. Still, if COVID cases continue to rise, energy demand will be curtailed. Commodities (and especially oil) could face substantial-to-severe price pressures this winter. We expect that the glut of diesel will only worsen.

Intemperate Weather, More COVID?

According to the CDC, COVID-19 spreads primarily “from person to person, mainly through respiratory droplets produced when an infected person coughs, sneezes, or talks.” COVID appears to spread most easily indoors in poorly-ventilated rooms, and when individuals are in close proximity to one another and not wearing face coverings. According to many epidemiologists, COVID transmission becomes more likely if individuals are confined to indoors (higher-risk) activities rather than outdoors (where droplets can disperse more easily).