Global product markets weekly: US product stock draws buoyed global margins

The oil market continued higher last week, further extending the increases of the previous weeks. North Sea Dated crude’s weekly average rose by US$2.08/bbl to US$68.17/bbl in the week to 12 March, the highest since December 2019. Prices remained supported by the intoxicating cocktail of supply restraint from the OPEC+ producers, and demand optimism for the months ahead, as the vaccine implementation programs gathered pace, particularly in Europe and the US. However, physical crude oil markets remain well supplied for now, particularly after the US inventory builds of the past two weeks. Refinery run rates remain low and global oil product demand has yet to substantially increase. Our global composite refining margin rose US$0.37/bbl to US$3.33/bbl, as gasoline cracks rose strongly in all regions. This was the highest value since April 2020, and US$0.21/bbl below the five-year low for this week of the year, and US$0.80bbl below the five-year average.