Global product markets weekly: Margins collapse following new Chinese export quota

Crude prices continued their descent last week with the Dated Brent crude price falling for the ninth week in a row. The weekly average was $2.60/bbl lower than the previous week and prices have fallen by almost a third since their peak in early-October. Prices have risen sharply today acknowledging the truce in the US-China trade war announced at the G20 summit. The market awaits news from the OPEC meeting later this week. Saudi Arabia needs higher prices but is under pressure from the US not to cut back on production. Russia has indicated that it is happy with prices around $60/bbl. The global composite refinery margin fell sharply despite the decline in crude prices. Most products in most regions weakened versus crude but the fall in the composite margin was in line with seasonal trends. A late increase in 2018 export quotas from China caused concerns that there could be surplus product while demand is seasonally weak.