London
Global crude exporters and refiners are locked in a stand-off, as Opec+ tries to drain excess crude stocks and lift prices and refiners face falling fuel consumption and shrinking margins. These drops are most evident in the market for middle distillates (gasoil, diesel and jet fuel), which have been hit hard by the twin impact of lockdowns and economic recession. While Brent prices have recovered most of their losses since the outbreak of the volume war between Russia and Saudi Arabia in March, refining margins for mid-distillates are just half their pre-lockdown level. In Northwest Europe, gross margins for making gasoil from Brent have fallen to less than $7 per barrel, from $13 in early March and $18 at the start of the year. Margins remain trapped close to their lowest level for the last 20 years, in the fourth percentile, and have trended lower again in the last few weeks.—Agencies
