Global products market weekly: Margins spike on US winter storm, oil hits seven year high

Bullish oil prices are being exacerbated by continued geopolitical tensions surrounding the Ukraine crisis and in the Middle East, and a winter storm in the US that disrupted some production in the Permian Basin. Although OPEC+ agreed to stick to a planned 400 kb/d output increase in March, latest data showed Iraq pumped well below its January quota adding to the market sentiment that a few members of the group are struggling to raise output to meet existing targets, despite the high price environment. A further draw in US crude and distillate inventories added to the price support. North Sea Dated crude’s weekly average increased by US$2.23/bbl, in the week ending 4 February 2022. Our ex-RVO global composite refining margin increased by US$1.06/bbl to US$5.55/bbl as both light and middle distillate cracks spiked in line with higher crude prices. Weekly margins were US$2.25/bbl above the five-year historical average for the same week.