Global product markets weekly: Margins soured by Dubai crude recovery

The oil market rose to an eight-week high last week. North Sea Dated crude’s weekly average rose by US$1.65/bbl to US$68.62/bbl in the week to 7 May. Prices rose sharply at the start of the week, as economic indicators, particularly from the US and China, improved expectations for oil demand. However, prices retraced some of these gains later in the week as concerns increased that the surge of new virus cases in India would have a deeper and longer lasting impact on demand. Physical crude demand improved as refineries increased runs after maintenance and economic shutdowns, adding some fundamental support to prices. Our global composite refining margin weekly average fell US$0.42/bbl, from a one-year high, to US$4.47/bbl. Light product cracks declined in all regions, with the sharpest falls recorded in naphtha.