Global product markets weekly: composite refining margin improves due to strength in gasoline and middle distillate cracks

The North Sea Dated weekly average inched up by US$1.10/bbl to US$40.64/bbl as transport demand recovers from the pandemic and extended production curbs from OPEC+ drain the global oil surplus. Iraq and Kazakhstan have promised to comply better with the pledged cuts and compensate for overproducing last month. The formal start of the Federal Reserve’s corporate bond-buying programme bolstered risk appetite, increasing liquidity in the oil futures market and supporting prices. The M1-M2 spread for North Sea Dated remained in backwardation, indicating a tighter prompt crude market with demand recovery in Europe and drawing floating storage of North Sea crude. However, concerns over a second wave of coronavirus with rising cases in China and the US limited the upside.