Global products market weekly: Omicron threatens transport fuels demand, margins weaken

The oil market fell at the end of the week amid concerns of the new virus strain Omicron posing downside risks to product demand as governments review lockdown measures and travel bans to contain its spread. Coordinated efforts to dampen oil prices by releasing strategic petroleum reserves (SPR) led by US, to be joined by China, Japan South Korea, India and Britain, had a limited impact on prices as volumes were lower than expected, while China remains non-committal. North Sea Dated crude’s weekly average were down by US$1.14/bbl, in the week ended 26 November. Our ex-RVO global composite refining margin declined by US$1.02/bbl to US$2.99/bbl, as the new Covid variant threatens demand recovery. Margins were hit by steep losses in transport fuels cracks in Europe and Asia. Weekly margins remained US$0.12/bbl above the five-year historical average for the same week.