Global products market weekly: Margins decline to early April levels on a sharp fall in middle distillate cracks

The oil market was volatile in the week as China looks to ease lockdown restrictions from 1 June, which will support a recovery in demand, lifting prices. Oil supply concerns remained for the US as it sees further reduction in crude inventories. However, US had started to ease some sanctions with Venezuela in the week, allowing for US companies to restart its negotiation with Venezuela on its upstream investments, which could see higher exports from Venezuela into the US, softening prices mid-week. North Sea Dated crude’s weekly average rose by US$5.60/bbl, in the week ended 20 May. Our ex-RVO global composite refining margin declined by US$5.86/bbl to US$22.70/bbl. Margins were weighed down by a sharp fall in middle distillate cracks globally. Weekly margins were at US$20/bbl above the five-year historical average for the same week.