Global product markets weekly: Asian margins tighten on expectations of lower Chinese exports

The oil market rose for a sixth consecutive week. North Sea Dated crude’s weekly average increased by US$0.65/bbl to US$76.02/bbl in the week to 2 July. Prices remained supported into the end of the week, despite the OPEC+ meeting concluding on Friday without a deal, with negotiations due to continue this week. The prospect of lower global crude oil inventories in 2H 2021 has been further supported by the recent US refinery run rate increases. Meanwhile the likelihood of Iranian crude returning to the global market has taken a few steps backward in the last two weeks. The spread of the Delta variant of Covid-19 remains a downside risk to oil demand, particularly in Asia. Our ex- RVO global composite refining margin remained almost unchanged US$1.07/bbl for a third week, and just above the four-month low. Margins in the US and Europe declined as refinery production has risen sharply in recent weeks, while margins in Singapore and the Middle East broadly increased.