Global products market weekly: Margins fall as product cracks slip on oversupply and crude strength

The oil market strengthened at the start of the week owing to supply disruption in Libya’s oilfield coupled with the US Federal Reserve’s intention to reduce interest rates on 23 August. Moreover, heightened geopolitical tensions in Middle East also added to crude pricing. However, a lower-than-expected draw in EIA crude inventory coupled with continued worries about weakening Chinese demand weighed on oil prices. North Sea Dated crude’s weekly average increased by US$1.70/bbl, in the week ended August 30. Our ex-RVO global composite refining margins continued to decline for the fourth consecutive week by US$1.02/bbl to US$3.45/bbl due to a fall across all product cracks in major regions hampered by weak demand. Weekly margins were US$4.87 /bbl, lower than the five-year historical average for the same week (excluding 2022).