Global products market weekly: Refining margins strengthen as crude prices fall despite volatility

The oil market saw huge volatility during the week. Crude prices strengthened midweek following the death of a Hamas leader in Iran and the Israeli air strike on Lebanon’s capital, Beirut, both of which sparked fears of a wider regional conflict in the Middle East. However, prices declined sharply by US$3.86/bbl on Friday over renewed worries over demand recovery from China and the US, a fall in US manufacturing PMI data to an eight-month low in July, coupled with a rise in US unemployment data which signalled a potential future US recession all added downward pressure to oil prices. North Sea Dated crude’s weekly average declined by US$2.06/bbl, in the week ended 2nd August. Our ex-RVO global composite refining margins increased by US$0.94/bbl to US$6.98/bbl, driven by rise in gasoline cracks and decline in outright crude prices. Weekly margins were at US$1.55/bbl below the five-year historical average for the same week - excluding 2022.