Global product markets weekly: Depleted USGC product stocks supported margins

The oil market moved higher in the second half of last week, further extending the increases of the previous weeks, as OPEC+ confounded market expectations and rolled over nearly all the current production curbs through to April with only Russia and Kazakhstan given an increase. North Sea Dated crude’s weekly average rose by US$0.39/bbl to US$66.09/bbl in the week to 5 March. The OPEC+ grouping implied that they would wait for signs of oil demand increases rather than anticipate it. Meanwhile, supplies of crude oil in the prompt physical markets seem abundant, as refinery runs remain low and global oil product demand has yet to substantially increase. The oil price rally continues to fuel broader concerns of economic inflationary pressures which in turn may lead to increased investment flows in the oil derivatives markets. Our global composite refining margin fell US$0.23/bbl to US$2.45/bbl, US$0.03/bbl below the five-year low, but US$1.53/bbl below the five-year average.