Securing a reliable supply of oil must be becoming increasingly cumbersome, an inevitable consequence of the ongoing conflict in the Middle East. Although ships are still passing through the critical Red Sea waterway, the Bab el-Mandeb Strait, their numbers are considerably lower than before the Houthis' naval blockade last week.
Our market remains in a state of confusion. We discuss below the possible reasons for the unprecedented divergence between crude oil and refined products, a chasm that widened significantly yesterday. The Heat/WTI differential reached a fresh record high of $95/bbl, as WTI fell by well over $3/bbl (Brent's decline was even steeper), while Heating Oil gained the equivalent of $1.65/bbl. The same trend can be observed in the RBOB crack, which settled above $61/bbl, also a record high.
As we head toward August, here in the UK it is known as the ‘silly season’ or more deliciously, ‘cucumber time’ in Europe. The summer period sees major public institutions such as Parliaments, courts and other news drivers closed leading to a period when light-hearted or oddball news dominates the headlines through a lack of anything serious.
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