Global product markets weekly: margins bounce back as gasoline firms

North Sea Dated rose for the sixth consecutive week during the week commencing 04 February 2019, rising approximately $0.30/bbl to average $61.80/bbl. The OPEC+ agreement saw roughly 90% compliance in January, showing the commitment the partners have to ensuring the market is balanced. Even so, the market has shrugged off supply side concerns over recent weeks. The US sanctions on Venezuela not only carve out the USGC from their heavy crude supply, but also risk the ability for PDVSA to export their diluted crude oil (with US-VZ naphtha shipments cut off). Also, the US is set to tighten its sanctions on Iranian oil in May, unless buyers receive a waiver extension. The forward curve has been trending towards backwardation, but a weak global refining margin picture and global economic headwinds threaten to keep the demand side subdued. Our latest outlook has the global benchmark averaging $63.00/bbl in February.