North America Crude Markets short-term outlook: June 2022

The inability of the global refining system to meet transport fuel demand has spurred unparalleled refining margins. In the current environment of structurally short refining system capacity, product cracks continue to rise. But with little refining capacity to incentivize back into production, prices are in search of the demand erosion point. With unmatched margin support, we expect continued ultra-high utilization of the US refining system through peak summer demand. Strong domestic refinery demand comes at a time when US crude and product inventories are low, crude exports are surging, and production growth remains subdued as capital discipline continues to reign in the shale patch. Other topics in this report include: • US coastal prices widen on US SPR releases and record exports to Europe • What does the WCSB logistical picture look like amidst a WCS differential blowout? • Cushing inventories near the operational floor as summer demand looms