Global product markets weekly: Crude price recovery triggers refinery margin collapse

Global crude prices increased sharply in the week commencing 27th August. The weekly average Dated Brent price rose by almost US$4/bbl, meaning Dated Brent was at a 14-week high. Crude prices strengthened following a consecutive weekly draw in US crude stocks and as refiners increase their demand for alternative grades to Iranian crudes in light of the US sanctions. Moreover, Venezuela was already struggling to sustain crude export volumes before a key loading at Port Jose was struck by a vessel late last week. The latest reports suggest Venezuela will now only be able to load vessels with a capacity up to 500 kbbls, whereas previously Port Jose was capable of loading vessels with a capacity up to 1 mbbls.