Oil markets are struggling to reconcile geopolitics with fundamentals as headlines push prices one way while physical signals pull in the other direction. The result is a market where Brent spreads and gasoil cracks appear strong on paper, even as North Sea grades compete for premiums and US crude arrives at a discount in Europe. Markets are operating on a split screen, with futures signalling at least some tightness still, while the physical market has been weakening markedly. The paper structure has soli ...

Russian diesel and gasoil shipments recovered in the third week of September despite the nation’s refineries continuing to struggle with intensified Ukrainian drone attacks https://t.co/Grt6Sd4uQo ...

Oil rose to a three-week high after futures topped a key technical level, accelerating gains driven by US President Donald Trump’s increasingly hawkish rhetoric against Russia as traders watch for supply disruptions from the OPEC+ member. West Texas Intermediate rose as much as 2.3% to top $64 a barrel after Trump said he thought NATO nations should shoot down Russian aircraft that violated their airspace and struck a more sympathetic tone about Ukraine’s chances of winning the war. He also reiterated the ...

Key Points Summary Industry Overview - The focus is on the refined products market, particularly gasoline and naphtha, with insights into seasonal price trends and supply-demand dynamics in the context of the summer season [1][2][3][6][12]. Core Insights and Arguments - **Supply-Demand Balance**: The clean products supply-demand balance remains tight, with production incentives favoring middle distillates when crude oil supply constraints are eased. The market's ability to withstand supply disruptions or unexpected demand is currently insufficient [2][3]. - **Seasonal Performance**: Historically, the RBOB crack spread has shown strong seasonal performance, with 7 out of the last 10 Julys experiencing price increases, averaging $2 per barrel. The maximum increase recorded was $8.1 per barrel, while the largest decrease was $3.2 per barrel [3][6]. - **Production Constraints**: Current production levels are at the lower end of the range compared to the past decade, primarily due to crude oil supply restrictions. Despite the easing of production cuts, OPEC+ heavy sour crude exports have not rebounded, impacting distillate production [3][12]. - **Hurricane Season Risks**: The hurricane season poses significant risks to supply, particularly in the Gulf Coast, where approximately 50% of U.S. refining capacity is located. Disruptions could lead to a temporary loss of refining capacity ranging from 500,000 to 2.5 million barrels per day [3][12]. - **Regional Performance Disparities**: There are notable differences in performance between Eastern and Western products, with Eastern products generally underperforming. The average return for European gasoline over the past decade has been particularly strong, with 8 out of 10 years showing positive returns [13][14]. Additional Important Insights - **Crack Spreads and Returns**: The average return for various products in July has been positive, with naphtha and gasoline showing particularly strong performance. The average return for European gasoline was $8.3 per ton, indicating attractive risk-reward dynamics [7][13]. - **Market Sentiment**: The market sentiment is cautious due to geopolitical risks and the potential for supply disruptions, which could further tighten the supply of gasoline and distillates [2][12]. - **Future Outlook**: The outlook for refined products remains optimistic, with expectations of increased middle distillate production if crude oil supply improves. However, the market remains sensitive to external shocks, particularly during the hurricane season [2][3][12]. Conclusion - The refined products market is characterized by tight supply-demand dynamics, strong seasonal performance, and significant risks associated with external factors such as hurricanes and geopolitical tensions. The potential for increased production exists, but market participants should remain vigilant regarding supply disruptions and regional performance disparities.