Global product markets weekly: Forties outage weighs on European margins

For the week commencing 11 December, refinery margin performance varied by region, but was generally weaker in the West and stronger in the East. Crude prices strengthened for most grades as a leak in the Forties Pipeline System (FPS) forced resulted in the immediate shutdown of the system. The FPS closure has removed 450 kb/d of oil from the market and the repair work is expected to last several weeks. This will negatively affect refiners who process Forties with refiners in the UK, Germany and South Korea among the largest consumers of Forties. The Brent-WTI differential widened sharply to almost US$7/bbl, despite a further 5 mbbls of crude drawn from US stocks.