Global products market weekly: Tight middle distillates and gasoline supply in Europe support margins

The oil market was volatile in the week as bearish sentiment built on a rise in covid cases in China, resulting in additional lockdowns. Financial markets fluctuated on rising inflation expectations and growing recession fears, as US core inflation rose to historical highs. An overall weak macroeconomic outlook contrasted with a sharp tightening of US middle distillate product inventories released on Thursday, which gave temporary support to oil prices. North Sea Dated crude’s weekly average edged lower by US$0.33/bbl, in the week ended 14 October. Our ex-RVO global composite refining margin increased by US$1.97/bbl to US$18.69/bbl, driven by strength in middle distillate cracks globally, while gasoline cracks in Europe also rose further. Weekly margins were at US$14.34/bbl above the five-year historical average for the same week.