Global products market weekly: Margins firm as Atlantic basin distillate cracks spike to offset Red Sea tensions

The oil market firmed at the start of the week driven by heightened geopolitical tensions in the Middle East and Ukraine drone attacks on Russian oil facilities. However, prices fell sharply by the end of the week despite OPEC+ decision to keep crude supply cuts unchanged through Q1 2024. This could not offset weaker market sentiment driven by ongoing discussions around a potential cease-fire between Israel and Hamas, China economic growth fears and the decision by the Fed to keep US interest rates unchanged. North Sea Dated crude’s weekly average increased by US$0.09/bbl, in the week ended 2 February. Our ex-RVO global composite refining margins increased by US$1.10/bbl to US$8.51/bbl, owing to rise in middle distillates cracks across regions amid supply shortage due to unplanned outages in the US amid a cold snap along with refinery maintenance in the Middle East and Asia. Weekly margins were at US$3.99/bbl above the five-year historical average for the same week (excluding 2022).