Markets

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 ..

Futures closing prices for Middle Eastern benchmark DME Oman jumped by 6.3% from the end of June to the end of Dec., European benchmark ICE Brent rose by 3.5%, and US benchmark NYMEX WTI was up by 2.4% over the six-month period.

After concerns over the Omicron variant lessened somewhat in the previous week, worries about the effectiveness of existing vaccines darkened sentiment over the week ending Dec. 17.

Even though the new COVID-19 variant has been found to be more highly infectious than previous strains, it has, so far, resulted in fewer hospitalizations than had been feared, so the demand impact is now expected to be less than initial projections indicated.

As more cases of the new COVID-19 variant appeared in various countries around the world and in states all across the US, futures prices for NYMEX WTI and RBOB, ICE Brent and gasoil, and DME Oman crude fell over the week ending Dec. 3, though the declines were much less severe than they had been in the previous week.

Both coking and cracking margins jumped at the US Gulf Coast from June, with the sharpest rise among the grades and blends covered in the charts below seen for the coking margin against the Argus Sour Crude Index. While coking margins also improved in the Midcontinent, they posted much smaller rises, and cracking margins in the region inched down.

Earlier in the week ending Nov. 26, the market fluctuated between the moderately bearish news of US President Joe Biden having convinced the leaders of other consuming nations to release crude from their strategic petroleum reserves (SPRs) and the bullish news that OPEC+ was considering slowing its production increases in response.

Throughout most of the week ending Nov. 19, market chatter focused on a shift from concerns about tight supplies to worries that a surplus will soon begin building.

Prices for front-month NYMEX WTI and ICE Brent futures slipped for a third week in a row as of Nov. 12 while NYMEX RBOB and ULSD decreased for a fourth consecutive week.