Global product markets weekly: margins crater as gasoline floor proves elusive

North Sea Dated rose for the fourth consecutive week during the week commencing 21 January 2019, rising over $2.00/bbl to average $61.10/bbl. The supply side continues to prop up the crude markets, as OPEC cuts have tightened the market and Venezuelan alarm bells ring. Although there is broad consensus of a global economic slowdown (or at least downward revisions to previous assumptions), this has not dampened the upward momentum of the global crude benchmark. This masks the effect on the product markets, however, as crack spreads have weakened considerably over the last month. Gasoline remains below or near zero in various parts of the world, and middle distillates have continued to ease off. Despite this weakening, it has yet to fundamentally alter the oil price from the demand side. Our latest forecast has North Sea Dated’s Q1 price averaging $62.70/bbl.