Markets

While there were some day-on-day declines due to the expectation that Iran may resume crude exports as negotiations over lifting sanctions were making some progress, NYMEX WTI and ICE Brent soared on Friday due to the tensions at the Russian-Ukrainian border.

Saudi Arabia set the Official Selling Price (OSP) for its heavy grade for buyers in the Far East at 70¢/bbl above the Middle-Eastern benchmark—down from the $1.80/bbl differential that had been in place for Jan.

Both coking and cracking margins jumped at the US Gulf Coast (USGC) and in the Midcontinent from July to Aug., with the sharpest rise among the grades and blends covered in the charts below seen for the cracking margin against Mars at the USGC.

In addition to sharp weekly price increases over the week ending Feb. 4, NYMEX WTI, ICE Brent, and DME Oman crude futures posted their largest month-on-month jumps since Feb. of last year.

NYMEX WTI and RBOB, ICE Brent and gasoil, and DME Oman crude futures posted their sixth week-on-week price increases over the week ending Jan. 18 while NYMEX ULSD saw its fifth weekly gain in a row.

Even though most petroleum futures prices pulled back on Thursday and Friday, the gains that had been made on previous days were enough to result in week-on-week rises.

Market chatter throughout the week seemed firmly focused on tightening fundamentals.

Reduced crude output from Libya and Kazakhstan as well as persistently low production from several OPEC members—combined with more projections that the Omicron variant will have a limited and short-term impact on demand—helped push futures prices for crudes and refined products to highs not seen in over a month.

Saudi Arabia set the Official Selling Price (OSP) for its heavy grade for buyers in the Far East at $1.80/bbl above the Middle-Eastern benchmark—up from the $1.00/bbl differential that had been in place for Dec. Iran increased the OSP differential on its Iranian Heavy for Far Eastern buyers by 70¢/bbl to a $2.15/bbl premium.

After 2020's price rout, 2021 was a year of recovery. From the end of 2020 to the end of 2021, ICE Brent futures prices gained 50.2%, DME Oman crude was up by 51.0% and NYMEX WTI soared by ..