Global product markets weekly: Seasonal demand offsets stronger crude prices

For the week commencing 14 May, the Dated Brent crude price continued to strengthen towards a weekly average of US$80/bbl, resulting in a fresh three-year high. On a daily basis, the Dated Brent price did close above US$80/bbl for the first time since early November 2014. The pending US sanctions on Iran and the expected reduction of crude exports was further supported by two Nigerian pipeline leaks last week: one on the Nembe Creek Trunk Line affecting the Bonny Light crude stream and one on the Trans-Forcados pipeline affecting Forcados crude. In the US, crude stocks continued to draw as crude runs increased seasonally ahead of the peak demand season, but crude stocks at Cushing increased for the fourth consecutive week, reflecting tighter pipeline constraints. The weekly Brent-WTI differential has consequently trended to almost US$7.50/bbl, the widest since February 2015.