Global products market weekly: Oil prices hit seven-year highs, weakness in light ends magnifies

The oil market gained for the fifth straight week, driven by increased tensions in the Middle East and supply disruption risks following an explosion on the critical Kirkuk-Ceyhan Pipeline in Northern Iraq. Market sentiment remains focused on geopolitical challenges linked to OPEC+ supply at a time when monthly output increases have fallen short of agreed output targets. Global investors appeared to take profits from the recent surge in oil prices which touched seven-year highs and the EIA reported a surprise build in US crude stocks. North Sea Dated crude’s weekly average increased by US$4.25/bbl, in the week ended 22 January. Our ex-RVO global composite refining margin declined by US$0.65/bbl to US$4.03/bbl as a surge in Brent prices amplified weakness in light distillates on the back of rising US gasoline inventories and slower demand for naphtha in Asia. Weekly margins remained US$1.65/bbl higher than the five-year historical average for the same week.