Global product markets weekly: Tight supply, strong demand raises margins

The oil market surged on expectations of a strong oil products demand outlook driven by a recovery from Covid and additional demand from the power generation and industrial sectors as an alternative to high priced natural gas. North Sea Dated crude’s weekly average rose by US$1.65/bbl in the week ended 11 October. Our ex-RVO global composite refining margin rose by US$0.52/bbl to US$7.46/bbl, recording three weeks of consecutive increases. Margins strengthened with tight supply of light and middle distillates on the back of strong demand for alternative fuels into power generation. Weekly margins were at US$3.53/bbl above the five-year historical average for the same week.