Strong demand for oil products is helping to drag oil prices higher, although the risk of a U.S. default and the upcoming OPEC+ meeting are the two major factors oil markets are watching, said.

Oil products seem to be dragging crude out of the quagmire before the OPEC+ meeting, with the strength in US gasoline futures lifting WTI and Brent to $72 and $76 per barrel, respectively. Should the ongoing debt ceiling talks between House of Representatives speaker Kevin McCarthy and President Joe Biden lead to a deal that prevents a government shutdown we might see a brief spike in oil prices, although attention seems to be gradually moving towards the upcoming June OPEC+ meeting.

Speaking at the Qatar Economic Forum, Saudi Arabia’s Energy Minister Abdulaziz bin Salman stated that OPEC+ will remain proactive and that oil speculators betting on prices to fall will be “ouching” again just as they did in April if they don’t mend their ways. OPEC asks Ecuador to rejoin its ranks. Three years after its departure in 2019, Ecuador has been invited by OPEC to rejoin the ranks of the oil group as the country’s previous problem – exceeding agreed production quotas – became irrelevant as production started to stagnate. Nigeria launches megarefinery, but not really.Nigeria’s outgoing president Muhammad Buhari commissioned the 650,000 b/d Dangote refinery – set to become the continent’s largest and at a cost of 19 billion also the most expensive – but its real start-up is expected in late 2023, at best.

According to S&P Platts, global air travel has finally returned to pre-pandemic levels this month as total commercial flights per day averaged 105,682 in the first two weeks of May, up 20% year-on-year. Global jet fuel demand, however, is expected to remain below 2019 levels for now as efficiency gains and a slower rebound in long-haul travel, especially in Asia, limit the consumption upside for the fuel. IATA estimates that new airplanes trigger fuel efficiency gains of around 2% per year and the pandemic has seen a widespread drive to replace older aircraft. With international seat capacity now 10% below 2019 same-month levels, attesting to flights being on average shorter than before, a full jet fuel demand recovery to 8 million b/d isn’t expected until 2027.