As we’ve said from the beginning of the COVID crisis, the virus is the primary force shaping all oil and gas market outcomes. US mobility demand is highly likely to rise next year as herd immunity is reached through a combination of immunity from vaccination or infection. We expect life in the US will return to “normal” by mid-to-late summer, although vaccinations from Johnson & Johnson and Oxford/AstraZeneca could significantly accelerate this timeline to as early as mid-March.

That’s the good news. The bad news is that a new strain of COVID-19 may be up to 70% more transmissible than earlier variants, increasing the number of COVID infections, population morbidity, and total mortality. Even more stringent containment measures appear likely in the next few months, further constraining mobility demand.

Dark days lie ahead, but with the first vaccines receiving approval, we have likely reached the beginning of the end of the virus.

The good: vaccines

According to Bloomberg’s vaccine tracker, at least 500,000 Americans have already received vaccinations, while up to 5.1 million doses may be distributed through the week of December 21st. Vaccinations are expected to sharply reduce new infections, limit sickness, and provide support for mobility and energy demand. At the same time, a dangerous new strain of COVID threatens to increase the virus’ spread.