Global product markets weekly: weakening middle distillate cracks weigh on composite refining margin

The North Sea Dated weekly average rose by US$1.01/bbl to US$41.65/bbl on tighter crude supplies due to the continuing impact of the OPEC+ production cuts and post-lockdown demand recovery. Nigeria and Angola shared plans to cut their output until the end of September, to align with the pledged deal caps and compensate for overproducing in May. The backwardation of the M1-M2 intermonth spread for dated-to-frontline swaps widened, indicating tighter supply in the prompt crude market. However, risk to the recovering demand outlook increased with infections spreading rapidly in South America and South Asia, potentially limiting the upside. US-Europe trade tension escalated as the Trump administration is considering tariffs on imports from Europe, dampening the price recovery.