Demand has risen in line with May estimates that second quarter gasoline would be off by 25pc from the same period in 2019 and diesel would be down by 5pc. Gasoline consumption was trending toward near-normal levels in the third quarter, Mears told the JP Morgan Energy, Power and Renewables conference.
"Refined products demand has been tracking back quite nicely," Mears said. "All told, we feel we are in a very good part of the country with regards to refined product demand in this environment."
Magellan refined products pipelines and terminals connect 15 states across an area stretching from Houston, Texas, to the Canadian border in Minnesota and South Dakota. The company estimated in March that travel and gathering restrictions to slow the spread of Covid-19 would ease in June and fully recover in July. Magellan now expects the recovery to occur later in the third quarter.
Magellan's rural fuels markets have fewer options to cut gasoline consumption for essential goods and services. Communities across the region also imposed lighter restrictions than in the hardest hit coastal areas, Mears said.
Trips to retail and recreation destinations ended last week within 10pc of year-ago levels in 12 of the 15 midcontinent states, according to Google Covid-19 Community Mobility data. Minnesota, Michigan and Illinois activity all remained at less than 90pc of baseline travel for such trips. Workplace commutes across the region also remain below 80pc of baseline activity.
Agriculture and logistics demand supported diesel consumption in the region. Magellan expected diesel demand for petroleum drilling basins in Texas and Oklahoma to remain down.
