Global products market weekly: Margins surge on renewed concerns of middle distillate supply as an EU import ban solidifies Report

Commodity Market Report 06 June 2022

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Report summary

The oil market rose early in the week, after EU reached an agreement on the ban of 90% of Russian oil imports. OPEC+’s decision on Thursday and news that Saudi Arabia might step in to fill for reduced Russian production triggered some weakness in prices. However, the announced 648kb/d increase in production for July and August doesn’t address the tightness in the refined product markets and prices rose by the end of the week. In the week ended 3 June, North Sea Dated crude’s weekly average increased by US$6.16/bbl. Our ex-RVO global composite refining margin increased by US$5.61/bbl to US$28.65/bbl. Margins rose as a ban on Russian waterborne imports into EU highlighted supply risks on middle distillate markets, boosting cracks. Weekly margins were at US$25.97/bbl above the five-year historical average for the same week.