(Bloomberg) — The havoc that the pandemic is wreaking in Brazil and Mexico is cooling demand for gasoline and diesel in two top markets for U.S. oil refiners.
Gasoline consumption in Mexico, which takes almost six in every 10 barrels of gasoline exported by the U.S., slumped to an eight-month low in January. Diesel sales in Brazil, which had surpassed levels seen prior to the pandemic, fizzled out and are at the lowest levels seen since May.
New lockdown measures in Mexico and Brazil are a setback for a corner of the fuel market that had been a bright spot for U.S. refiners until recently, illustrating how the anticipated return to global normality is still full of uncertainties.
Last year, demand from Latin America helped U.S. fuel makers to weather the effects of the pandemic because Brazil and Mexico eased lockdown measures faster than other economies. Now, both countries had to reimpose restrictions amid a slow rollout of vaccinations.
While the number of deaths from Covid-19 is falling across the globe, Brazil reported record fatalities and Mexico now has suffered the third-most coronavirus deaths of any country.
But the decline in Latin American demand is coming as refiners on the U.S. Gulf Coast are still struggling to restart operations after frigid temperatures forced many to shut down in the third week of February. And the outlook for demand at home is now much brighter.
“The U.S., which lagged behind Latin America in…