Global product markets weekly: Refinery margins recover, but high crude prices continue

Following three weeks of globally weaker refinery margins, the week commencing 15 January saw the reversal of this trend as margins improved across all regions. Uncertainty in the crude market remains as last week saw crude markers in the US and Middle East improving whilst Dated Brent weakened. Dated Brent eased from its three-year high, however, the market remains cautious to any supply disruptions in Nigeria, Libya and Iran and further upside risk prevails. The Brent-WTI differential narrowed to average US$5.60/bbl, an eight-week low reflecting a weaker Brent market as refiners prepare for seasonal maintenance. Crude draw downs in the US continued and a further 6.8 Mbbls left inventory last week. Since early November, 45 Mbbls of crude oil has been drawn from inventory in the US.